WRONG FUEL DATA: Korean automakers Hyundai and Kia have been hit with the largest Clean Air Act violation in US history for overstated fuel-consumption advertisements. Image: Hyundai
SEOUL, South Korea - Earlier in November 2014, Wheels24 reported that Hyundai and sister Korean company Kia will pay the US government a penalty equivalent to R1.1-billion to end a two-year investigation into "overstated" fuel consumption claims on about a third of its vehicle products.
Following the investigation, the automakers announced a plan to triple the number of fuel-efficient cars by 2020, addressing concerns about the pair's green track record and competitiveness in fuel economy.
The announcement on Wednesday (Nov 12 2014) came a week after the pair pledged to raise the fuel economy of their vehicles by 25% by 2020 to meet emissions regulations in the United States and Europe and at home in South Korea.
LAND DEAL ROW
It also followed an announcement on Tuesday (Nov 11) that the pair would buy back R6-billion worth of shares, in what was widely regarded as an attempt to appease investors angered by a R100-billion bid for property for new headquarters.
Analyst Yim Eun-young of Samsung Securities said: "Investors have complained about Hyundai's lack of shareholder-friendly policies and communication about its vision, especially after the land deal.
"Today's announcement seems to be part of its efforts to soothe shareholders and better communicate with the market."
Shares of Hyundai have fallen 25% in 2014 but have risen over 17% since hitting a more than four-year low on November 5. Kia stock has declined 0.9% while the benchmark index has lost 2.4%.
Under Wednesday's plan, Hyundai and Kia will raise their number of fuel-efficient cars to "at least" 22 by 2020 from seven now.
AIMING FOR THE NO.2 SPOT
Hyundai, Kia said in a joint statement: "We have set an internal target of making it to No.2 in the global eco-friendly car market, which is expected to grow from this year's 2.2 million vehicles to 6.4 million in 2020."
Hyundai and Kia plan to release 12 models powered by gasoline-electric hybrid engines, expanding the line-up to small cars and sport utility vehicles.
The pair's green range will also have six plug-in hybrid mid-sized and compact cars, two fuel-cell cars and two battery-powered electric cars.