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False fuel claims: Hyundai to pay R4.1bn

2013-12-30 07:54

HYUNDAI, KIA TO COUGH-UP BILLIONS: Hyundai and Kia will pay a total of R4.1-billion as the automakers agree to settle lawsuits regarding false fuel consumption claims. Image: AFP

North American subsidiaries of Hyundai and Kia said they had reached an agreement to pay a total of R4.1-billion to settle lawsuits filed by owners of cars affected by the automakers overstatements of fuel economy ratings. Owners can opt for a one-time payment or a ‘lifetime reimbursement’.

The agreement affects 600 000 Hyundai and 300 000 Kia vehicles in the US produced from 2011 to 2013.


In November 2012, the two automakers conceded that they overstated fuel consumption after the US Environmental Protection Agency found errors for 13 Hyundai and Kia models built from 2011 to 2013.

Hyundai and Kia both gained larger shares of the US new-vehicle market in the past decade, particularly during the economic downturn of 2008 to 2010 when consumers saw bargains in their line-ups of fuel-efficient and relatively low-priced vehicles.

The amount each automaker will pay will depend on how many owners opt for a one-time payment rather than participate in a "lifetime reimbursement" program in which owners get debit cards to pay them for the difference between actual fuel economy and what the company stated.


Hyundai estimates that the lump-sum payments will cost about R2.2-billion and for Kia the figure is R1.9-billion.

Hyundai estimated that the average lump sum payment would be the equivalent of R3300, minus any previous reimbursement payments received.

Brad Benson, dealer principal of a Hyundai agency in South Brunswick, New Jersey, said the fuel economy issue hadn't had a major effect on sales.

Benson said: “Hyundai handled the initial settlement well in November 2012, and we've had no issues with customers.”

The proposed settlement will go to the plaintiffs of the 53 US lawsuits filed, which were later consolidated. If the plaintiffs accept the settlement, it will then go up for approval by the US District Court for the Central District of California.

The proposed settlement does not affect class-action cases brought in Canada. Hyundai spokesman Chad Heard in Canada said Hyundai hoped that a proposed settlement to those cases could be reached early in 2014.

Read more on:    kia  |  hyundai  |  usa  |  motor industry  |  lawsuit  |  fuel economy  |  automaker

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