Santa Fe DM faces mileage retestSources at the Ministry of Land, Infrastructure and Transport say Hyundai Motor may be asked to pay consumers more than 100 billion won ($93 million) if its fuel efficiency postings for its Santa Fe DM sport utility vehicle prove to be false.
According to media reports, the ministry notified the nation’s largest automaker that the two-wheel-drive Santa Fe DM with an R 2.0 diesel engine did not meet reported fuel efficiency levels during its inspection test last year. Also falling short of claims was Ssangyong Motor’s Korando Sports four-wheel-drive AT6.
The two automakers have appealed the decision and the ministry said yesterday that it will perform another inspection that should be completed by late March.
If the original results stand, Hyundai may have to compensate Santa Fe buyers at a level similar to what the company is doing in North America. Hyundai and its small affiliate Kia Motors have been running reimbursement programs after the U.S. Environmental Protection Agency in 2012 found inflated mileage?ratings on some of their vehicles.
According to the ministry, Hyundai said its midsize SUV gets 14.4 kilometers per liter (33.8 miles per gallon), but the test by the Korea Transportation Safety Authority under the Transport Ministry showed fuel efficiency of 10 percent less than that. The ministry allows a margin of error of 5 percent.
However, Hyundai said the result contradicts earlier test results from the Ministry of Trade, Industry and Energy. The Transport Ministry said the Energy Ministry might use different test equipment settings. The Transport Ministry until 2012 tested only commercial vehicles and started to check passenger cars only last year.
Hyundai asked the Transport Ministry to test three Santa Fe DMs instead of one and use a warm-up distance of 5,500 kilometers (3.4 miles) to 6,500 kilometers. Ssangyong, meanwhile, asked for 9,000 kilometers.
Currently, the Automobile Management Act doesn’t include a clause requiring automakers to compensate consumers for inaccurate mileage claims. The Transport Ministry said it is considering revising the law to set compensation standards.
For North American consumers, Hyundai and Kia agreed to pay a total of 500 billion won - calculated based on miles driven and average fuel costs - for misstating mileage for their vehicles. In addition, they added 15 percent to the required amount to compensate buyers for the inconvenience.?
Industry observers said that if Hyundai uses a similar reimbursement program for Korean consumers, the automaker might have to pay up to 120 billion won. From May 2012 to July 2013, Hyundai sold about 89,500 units of the Santa Fe DM.
In addition, if it is determined that Hyundai falsely reported the mileage, the company may be fined 1 billion won. Hyundai is confident its car will pass the upcoming test.
“The test result hasn’t come out yet, so it is not right to talk about a reimbursement program at this moment,” said a Hyundai spokesman. “Even if we failed the test, the government can’t force us to follow such a reimbursement program because that’s an issue between the automaker and consumers.”
BY JOO KYUNG-DON [email@example.com]