Automaker to reimburse U.S. buyers for fuel costs

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Automaker to reimburse U.S. buyers for fuel costs

The U.S. branches of Hyundai Motor and Kia Motors said on Saturday they will reimburse U.S. buyers of about 900,000 vehicles after the U.S. Environmental Protection Agency (EPA) announced one day earlier that the automakers had overstated the fuel economy of several models.

Hyundai and Kia acknowledged they made American customers confused and accidentally misled them about their fuel expenses by providing inaccurate mileage information.

The companies have not yet released an estimate of how much compensation they will provide.

They plan to give debit cards to customers who bought 13 kinds of 2011, 2012 and 2013 edition models of their U.S.-made automobiles. The cards will carry values covering the difference between the EPA’s fuel-economy ratings and those initially promised by Korean automakers. These will be based on fuel prices in the customers’ regions and the number of miles they have driven, plus an additional 15 percent for their hardship.

The companies said they would run newspaper advertisements apologizing for the incorrect ratings, and provide details on how the customers can apply for the cards from yesterday.

“The errors were inevitable, because the testing of the ratings took place at our research center in Hwaseong, Gyeonggi,” said Park Min-hyung, a PR official at Hyundai Motor’s Seoul-based headquarters. “Although we complied with the testing criteria demanded by the U.S. agency, environmental factors also affect the results.”

Park said the differences between outside temperatures and air resistance here and in the U.S. may have caused the discrepancies.

The EPA said Hyundai and Kia must re-label the window stickers on the 13 models. Since December, they have been claiming that their automobiles reach 17 kilometers per liter (40 miles per gallon) in the stickers and in media advertising.

The models include Hyundai’s 2011 and 2012 Elantra, Kia’s Soul and most 2012 and 2013 models. The Soul is expected to face the largest adjustment as it lags by 2.55 kilometers per liter in its highway rating, while the rest fall short by 0.4 to 0.85 kilometer per liter.

“Given the importance of fuel efficiency to all of us, we’re extremely sorry about these errors,” John Krafcik, CEO of Hyundai’s U.S. sales unit based in Costa Mesa, California, said in the statement. “We’re going to make this right for everyone.”

This is the first time the EPA has found a large number of vehicles from the same automaker bearing inaccurate mileage ratings since 2000, when it began testing vehicle mileage.

Hyundai Motor Group appears to have made the reimbursement decision voluntarily in order to prevent further consumer complaints and keep its growth momentum in the U.S. market.

Hyundai and Kia have posted combined sales of 1.07 million units this year as of October, taking sixth place in the U.S. auto market.

In February, Honda was ordered to compensate an American customer 11 million won ($10,090) for overstating the fuel-economy rating of the 2006 Civic Hybrid. This spurred a wave of complaints demanding $2 billion of damages from Honda. The cases are ongoing.

By Song Su-hyun, Bloomberg [ssh@joongang.co.kr]

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