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Big money for a little lie

Last week, reports surfaced that Hyundai and its Kia Motors division had been found by the EPA to be quoting incorrect fuel economy numbers for 2012 to 2013 model vehicles. At the time, we mentioned that it was estimated that the flub would cost Hyundai millions of dollars in repartitions to customers who purchase their vehicles expecting to get the claimed fuel economy.

Hyundai and Kia both agreed to revise numbers on window stickers and reimburse owners of approximately 1.1 million affected vehicles that were sold since 2010 in North America. That number includes about 900,000 vehicles in the United States alone. Revising the window stickers has decreased the fleet wide MPG average for Hyundai-Kia by 1 mile per gallon from 27 mpg combined to 26 mpg.


The Hyundai Veloster was one of several models to have its fuel economy ratings cut
 
Moody's is estimating that the cost for the mistake will be about $100 million. Hyundai US executive John Krafcik said last week that, "Our focus is on making it right for the customers. We're honestly not so focused on that cost."

Moody's Investors Service said in a report, “Both companies have adequate financial cushions and the impact on their competitive positions will be manageable."
 
"The impact on the companies' brand recognition and sales performance in North America could be more material, given that high fuel efficiency has been one of their key selling points and the region is the group's largest market," says Chris Park, a Moody's vice president and Senior Credit officer.

Hyundai and Kia have attributed the misleading window sticker claims to a mistake in testing methodology. Hyundai is the fifth-largest automaker and North America accounted for 24% of the automaker’s global sales volume during the first nine months of 2012.

Source: Detroit News



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still my buddy in ontario
By Pirks on 11/7/2012 10:47:46 AM , Rating: 0
purchased kia rio because he said this was the best bang for the buck with most comfort features best longest warranty and most advanced engines and transmissions in any car below 18k price. looks like when its time for me to replace my toyota i need to seriously consider kia too. my buddy owns a few cars a van and a truck so i kinda trust him.




RE: still my buddy in ontario
By EasyC on 11/7/2012 11:47:01 AM , Rating: 2
Did you honestly just say you're going to consider going from Toyota to Kia ???

God I hope you're being sarcastic...


RE: still my buddy in ontario
By mjdaly on 11/7/2012 12:41:04 PM , Rating: 2
The build quality of any modern Kia is quite good these days compared to the Kia of old. In fact, if you took a look at a Kia from around 2001 and compared it to one from 2005, they are night and day as far as design and build quality goes. I drive a 2001 Sportage and while some of the interior build quality has been lacking as it aged, my mom drives an 05 Sorento that is much better than her 95 Explorer was. The neighbors 2010 Sorento is still much better than the 2005 model that my mom drives.

Rather than slam it based on what you know of 10+ year old models, go give a new one a try next time you are looking for a car and be prepared to be surprised. They are quite good for the money and have a great warranty as well.


RE: still my buddy in ontario
By silverblue on 11/7/2012 1:07:13 PM , Rating: 2
I wasn't a fan of the Kia Carens/Rondo, but the Cee'd is a nice car. Regardless, they're well equipped - my old boss traded his '03 VW Sharan for an '05 Hyundai Trajet and he got a lot more for his money. A seven year warranty on some vehicles for both marques is just icing on the cake.


RE: still my buddy in ontario
By bebimbap on 11/7/2012 2:12:29 PM , Rating: 2
I own a Hyundai Elantra, and many other Toyota before it. And for myself, Ergonomics are very important even if the car is "cheap" it must have good value. The true cost of ownership for the Elantra vs a Corolla would be a win for the Hyundai, but you are paying for it with comfort. The Elantra is very loud on the road, though for the price it is "quiet enough." engine is weak, but again for the price... The ergonomics have a very cheap feel. makes you think that even china could produce better, but sadly everything that Hyundai makes is probably made by either the Chinese or Vietnamese... The "cloth" seats aren't cloth. Before buying the Hyundai I didn't know there was such a thing as Faux-cloth, or Faux-plastic.
For a couple of grand more The quality of the car would fee much better. I would say, definitly worth it.
If you want something new with 4 wheels with good mpgs and low price, yes Hyundai can't be beat, but I could also buy a 5 year old used Cadillac for that price, though MPG's would suck, the out of pocket amount I would pay would probably be about the same. If you want to feel good about driving a car, and unless you are the THING or the HULK I would have bought another car with better ergos/value probably Toyota or Honda.


RE: still my buddy in ontario
By Samus on 11/7/2012 2:54:24 PM , Rating: 2
I personally couldn't own a Korean car. Don't get me wrong, I love Samsung electronics and Korean culture but Toyota and the Japanese as a whole will always make vastly superior cars to the Koreans.

Even if the decision came down to price or style, Toyota's cost very little more, 15% on average, while losing their value half as fast. As for style, they're all hideous, so who cares :)


RE: still my buddy in ontario
By Richard875yh5 on 11/8/2012 9:47:36 AM , Rating: 2
A noisy car is a sign of a cheap car. No matter how cheap, I will not own a noisy car, and many like myself feel that way.


RE: still my buddy in ontario
By wordsworm on 11/8/2012 9:35:36 PM , Rating: 2
There are a lot of noisy expensive cars out there, too. All noisy cars should be banned.


RE: still my buddy in ontario
By NellyFromMA on 11/7/2012 3:17:44 PM , Rating: 2
So, I'm not really into Hyundai or Kia but had been considering it as Honda hasn't been the value prospect it once was (you get what you pay for, but its not bargain city by any means).

My supervisor has had hyundais and now a Kia Koup(e) and while he did like the car, its been swaying him from burchasing another H or K brand because of the ridiculous maintenance schedules, costs, and low build quality on parts. His car is maybe 3-4 years old and is already exhbiting extremely bad tire wear on his new tires as well as needing a new control arm.

That's NUTS. So, not even regarding this fiasco he's been lost as a loyal customer.

Needless to say, I won't be exploring Hyundai as my new 'Honda'.


RE: still my buddy in ontario
By JazzMang on 11/8/2012 7:58:34 AM , Rating: 2
I think going from a Toyota to a potato would be an improvement these days. Toyota is not what they used to be...


RE: still my buddy in ontario
By shadowamazon on 11/13/2012 2:17:28 PM , Rating: 2
Lexus is still very much the old Toyota I came to expect.


RE: still my buddy in ontario
By Sazabi19 on 11/7/2012 12:29:23 PM , Rating: 2
I was honestly looking at the Veloster turbo but then saw the actual fuel economy it got (not the old/new numbers) and was fairly shocked. The way it was marketed it looked as though it got almost 40mpg as well. It doesn't, so I def won't be getting it. I hope they fix the lame steering feel to the regular version, even at "only" 37 mpg when you load that baby all the way up it comes out to a nice price and a good deal. This was a flub in my opinion and I hope they recover from it. Hyundai (and Kia) have both really struggled to get their game back up in the US and have made HUGE strides where no one else has. They went from being not usually considered for most Americans to being very high on the list. Their warranty and base features were alone a great reason for me to pick then, then their fuel economy really grabbed my attention. It may not be 40mpg, but 37 is a hell of a lot better than my Nissan Rogue's AWD 26mpg hw. Trying to find a cheap vehicle with good features and good mileage is kinda hard at the moment, lots of trade offs and differences between manufacturers. Hyundai is doing it right.


RE: still my buddy in ontario
By PaFromFL on 11/8/2012 8:10:36 AM , Rating: 2
My daily driver is a 2012 Kia Optima SX built in Georgia. It is very roomy and comfortable, well constructed, handles well, has a great transmission, a 100,000 mile 10 year warranty, seat memory, heated and cooled seats, and develops 274 hp and 269 ft-lbs over a broad range of rpms. My mileage is about 10% less than the EPA ratings, as expected when using E10 gasoline.


"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer














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