Hyundai, Kia overstated mileage on more than 1 million cars

Fri Nov 2, 2012 2:55pm EDT
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By Ben Klayman and Deepa Seetharaman

(Reuters) - Hyundai Motor Co (005380.KS: Quote) and its affiliate Kia Motors Corp (000270.KS: Quote) conceded on Friday that they overstated the fuel economy by at least a mile per gallon on more than 1 million recently sold vehicles, and agreed to compensate owners for the additional fuel costs.

The U.S. Environmental Protection Agency found the errors in 13 Kia and Hyundai models from the 2011 to 2013 model years. The findings were a blow to the two carmakers who have centered their marketing campaigns on superior fuel economy.

About 900,000, or 35 percent, of the cars sold in the United States through October 31 were affected by the changes in addition to 172,000 cars sold in Canada, Hyundai and Kia said in joint statement on Friday.

"Given the importance of fuel efficiency for all us, we are extremely sorry for these errors," said John Krafcik, head of Hyundai Motor America. "When we say to Hyundai owners, 'We've got your back,' that's an assurance we don't take lightly.

The mileage on most labels will be reduced by 1 to 2 miles per gallon, with the largest adjustment being a 6-mpg highway reduction for one version of the Kia Soul, the EPA said.

The South Korean automakers said the changes will result in the 2012 Hyundai-Kia fleet fuel economy level being reduced by an average of 3 percent, to 26 mpg from 27 mpg.

Customers will receive a debit card that will reimburse them for the difference in the EPA fuel economy rating, based on the fuel price in their area and their miles driven. An extra 15 percent to the amount will be added to acknowledge the inconvenience and owners will be able to refresh their cards for as long as they own their vehicles, the companies said.

The two companies are also planning a full-page newspaper ad for Sunday to apologize for the fuel economy errors, which stemmed from differences in its mileage tests from the EPA' tests.   Continued...

The logo of Hyundai Motor is seen on the wheel of a car at a Hyundai dealership in Seoul October 25, 2012. REUTERS/Kim Hong-Ji