South Korean auto companies Hyundai and Kia owe a $100 million fine for exaggerating the fuel economy estimates of 1.2 million cars. An investigation conducted by the Department of Justice and Environmental Protection Agency (EPA) found that the companies’ erroneous mileage information violates the Clean Air Act. As a result of the misstatement, an estimated excess of 4.75 million metric tons of greenhouse gases has been emitted. Half of the affected vehicles were sold in the United States. “This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact,” said EPA Administrator Gina McCarthy in a statement. “Businesses that play by the rules shouldn’t have to compete with those breaking the law.” In addition to the fine, which is the largest in the history of the Clean Air Act, the automakers will relinquish an estimated $200 million in environmental credits and invest $50 million in measures to eliminate potential violations in the future. Hyundai and Kia are run by the same automaker but have separate marketing and sales operations in the United States. The companies stated that the inflated one- to six-mile per gallon error in fuel economy, depending on the vehicle, resulted from “procedural errors” at a joint test center in South Korea. In an effort to remedy the situation, both automakers are offering owners of affected automobiles various options to settle inconveniences caused by the overstatement in mileage. One option is to receive a dealership credit worth 150 percent of the lump-sum payment toward repairs and service; another is to receive 200 percent of the lump-sum for the purchase of a new Hyundai or Kia; a third option is to issue owners debit cards to reimburse them for gasoline costs incurred due to the lower mileage, plus a 15 percent inconvenience premium. However, other attorneys and consumers said a debit card system is too complex, and filed lawsuits seeking damages instead. have gone on to file lawsuits seeking damages. “The damage to consumers is far greater than the $100-million fine announced by the government,” said Harvey Rosenfield, an attorney involved in the class action litigation, to the Los Angeles Times. The proposed lawsuit settlement is expected to amount to around $400 million, but Rosenfield anticipates a lesser payout from the automakers due to complicated forms necessary for owners to acquire their portion of the settlement. In the meantime, Hyundai Motor America CEO David Zuchowski said the automaker has been cooperative in reimbursing affected customers and in the EPA’s investigation. “We are pleased to put this behind us, and gratified that even with our adjusted fuel economy ratings, Hyundai continues to lead the automotive industry in fuel efficiency and environmental performance,” he said in a statement. The Los Angeles Times reported that affected Hyundai vehicles include the 2012-13 Accents, 2012-13 Azeras, 2011-13 Elantras, 2012-13 Genesises, 2013 Santa Fe Sport, 2011-12 Sonata Hybrids, 2012-13 Tucsons and the 2012-13 Velosters. Kia automobiles with overstated mileage include the 2011-12 Optima Hybrids, 2012-13 Rios, 2012-13 Sorentos, 2012-13 Soul and 2012-13 Sportages.
(With reports from the Los Angeles Times and USA Today)
(www.asianjournal.com)
(LA Weekend November 8-11, 2014 Sec. D pg.4)
