In a first, Hyundai to compensate local SUV buyers

Hyundai Motor yesterday announced it will compensate Santa Fe owners up to 400,000 won ($389) after the Ministry of Land, Infrastructure and Transport determined the automaker had inflated its gas mileage estimates.

The nation’s largest automaker yesterday released a statement lowering its fuel efficiency estimate for the Santa Fe 2.0 Diesel 2WD from 14.4 kilometers per liter (33.8 miles per gallon) to 13.8 kilometers per liter (32.4 miles per gallon).

“As a manufacturer, we are deeply sorry that our customers have concerns regarding the government’s announcement on the Santa Fe’s fuel efficiency,” Hyundai said in a release.

The company said it measured the difference between the original stated gas mileage and the revised estimate over 14,527 kilometers (9,026 miles) - which is the annual average for cars with engine displacements under 2,000cc in Korea - and fuel costs over the past five years to calculate the level of compensation. It also considered customers’ “psychological inconvenience.”

“We will notify consumers via mail or through a separate website that shows details of the compensation and process,” the company said in a release. “However, since we have to establish the compensation system, it will take some time. We apologize to our customers for that.”

Ford Korea recently compensated consumers for inflated gas mileage on its models, but this is the first time for a Korean automaker.

Even when Hyundai started to compensate more than 900,000 consumers in the United States in 2012 for the inflated mileage claims, the automaker didn’t compensate local consumers, citing different standards in the two countries.

Industry insiders expect the decision will cost Hyundai as much as 56 billion won. According to the automaker, more than 136,000 Santa Fe 2.0 Diesel 2WD models had been sold in Korea as of last month. Including Santa Fes bought in August, the compensation likely will cover more than 140,000 cars.

The compensation plan does not affect a lawsuit filed by about 1,700 Santa Fe owners seeking 1.5 million won each.

The flagship company of Hyundai Motor Group said the automaker is not obligated to compensate consumers under the current law.

The controversy began when the Transport Ministry’s inspection last year found that mileage claims for the Santa Fe and Ssangyong Motor’s Korando Sport 4WD AT6 exceeded 5 percent of actual mileage.

The two automakers complained they had no problems under the Ministry of Trade, Industry and Energy’s inspection.

At a joint press briefing in June, the Transport Ministry firmly held to its findings, while the Energy Ministry said its inspection found the mileage claims had not been inflated.

Since then, the Transport Ministry, which will be managing all fuel efficiency inspections, has asked the automakers to notify consumers and come up with compensation plans.

Ssangyong said yesterday it has not yet made a decision on compensation.

The automaker, which specializes in SUVs and is owned by India’s Mahindra, said it plans to make a decision after the ministry explains its testing process and why the Korando Sport model received such a result.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]