Misstated Fuel Economy Fiasco Will Cost Hyundai $100 Million
November 7, 2012 9:13 AM
comment(s) - last by
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.
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RE: still my buddy in ontario
11/7/2012 3:17:44 PM
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'.
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