Hyundai, Kia admit to overstating fuel economy
11-02-12, 05:18 AM
#1
Speaks French in Russian
Thread Starter
Hyundai, Kia admit to overstating fuel economy
http://www.detroitnews.com/article/2...#ixzz2B3k3TASe
Washington — Hyundai Motor America and Kia Motors America on Thursday admitted to overstating the estimated fuel economy posted on window stickers of about 900,000 vehicles sold since late 2010. They will spend millions of dollars to compensate owners for the faulty claims.
Prompted by an ongoing investigation by the U.S. Environmental Protection Agency, Hyundai and Kia are lowering the fuel economy estimates on a majority of 2012-13 models after EPA testing found discrepancies between its own results and the company's data.
The reductions are unprecedented in the auto industry, which aggressively uses high gas-mileage ratings to woo customers, especially in an era of high prices. EPA said mpg window sticker values have been reduced on just two vehicles since 2000.
Hyundai, which has repeatedly touted that it leads the industry with four models that get 40 miles per gallon on the highway, will have to retract the claim, because the estimated highway mileages of the 2013 Accent, Veloster and Elantra will fall to 37 or 38 mpg, EPA records obtained by The Detroit News show.
In an interview with The News, top Hyundai and Kia U.S. executives apologized. They vowed to compensate owners for the misstated mpg claims.
"Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors," said Hyundai Motor America President and CEO John Krafcik. "We're going to make this right."
Krafcik blamed the problem on "procedural errors" in the company's fuel economy testing. "We've identified the source of the discrepancies between our prior testing method and the EPA's recommended approach," he said.
Michael Sprague, Kia America's executive vice president for marketing and communications, said the company "really regrets deeply the errors and … we sincerely apologize to all our owners."
As a result, Hyundai-Kia's combined fleetwide fuel economy average will fall from 27 to 26 mpg for the 2012 model year, or about 3 percent. But both companies will still be in full compliance with federal fuel economy requirements, Krafcik said.
He said the issue impacts 35 percent of 2011-13 vehicles sold through October — about 900,000 vehicles. Of those, the mileage estimates of about 580,000 will fall by 1 mpg; 240,000 will see mileage estimates fall by 2 mpg. The reduction is 3 to 4 mpg for the remaining 80,000 vehicles.
Hyundai-Kia on Thursday was printing new window stickers and they will be applied starting today. "We should have this done in a matter of days," Krafcik said.
Customers to be reimbursed
For customers who bought vehicles with the faulty readings, Hyundai will reimburse them for the lower gas mileage.
Dealers will check cars' odometers and calculate how much owners might have saved if the cars achieved the promised gas mileage. Hyundai and Kia will add 15 percent to the dollar total and send debit cards to owners. And they will continue to reimburse customers for as long as they own the vehicles.
An owner who drove 15,000 miles in Florida this year in a car that overstated its fuel economy by 1 mpg would get a refund of about $88, Sprague said.
That figure doesn't include future payments, so at $100 or more per vehicle, the program could easily cost Hyundai tens of millions of dollars.
Both brands will launch new websites to explain the program to customers. Future owners will not be reimbursed.
The EPA said its investigation is ongoing and it could seek to impose civil penalties. Krafcik said the company is fully cooperating.
"Consumers rely on the window sticker to help make informed choices about the cars they buy," said Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation in a statement.
Other federal agencies could investigate, including the Federal Trade Commission for advertising claims.
The EPA declined to comment when asked if any other agencies are involved.
Older models not affected
Hyundai and Kia share the same Korean parent company. U.S. units operate as separate sales and marketing companies, but share a joint research and development arm.
Hyundai-Kia's research arm changed its testing procedure in 2010. The reason that some current models aren't affected is because their window mpg ratings were validated before 2010.
But the company is confident that no older models have discrepancies with their window stickers.
Sung Hwan Cho, president of Hyundai America Technical Center Inc., said the company in 2010 changed testing procedures to calculate road resistance that accidentally overestimated the fuel economy.
It's impossible to say how many sales Hyundai may have gained because of higher mileage numbers, but automakers have touted 40 mpg as a benchmark to draw consumers to showrooms.
Krafcik compared the problem to Hyundai's early years in the U.S. market when it had quality problems and fixed them.
The EPA noted that the only two models since 2000 to see a reduction in vehicle mpg were the 2001 Dodge Ram pickup, which fell by 1 mpg, and a 2012 BMW 328i, which fell by 2 mpg highway/1 city.
Both were isolated instances and not the result of a broad company issue.
About eight months ago, staff at EPA's National Vehicle and Fuel Emission Laboratory in Ann Arbor observed discrepancies between results from EPA testing of a 2012 Elantra and data from Hyundai. EPA expanded its investigation into data for other Hyundai and Kia vehicles.
Prompted by an ongoing investigation by the U.S. Environmental Protection Agency, Hyundai and Kia are lowering the fuel economy estimates on a majority of 2012-13 models after EPA testing found discrepancies between its own results and the company's data.
The reductions are unprecedented in the auto industry, which aggressively uses high gas-mileage ratings to woo customers, especially in an era of high prices. EPA said mpg window sticker values have been reduced on just two vehicles since 2000.
Hyundai, which has repeatedly touted that it leads the industry with four models that get 40 miles per gallon on the highway, will have to retract the claim, because the estimated highway mileages of the 2013 Accent, Veloster and Elantra will fall to 37 or 38 mpg, EPA records obtained by The Detroit News show.
In an interview with The News, top Hyundai and Kia U.S. executives apologized. They vowed to compensate owners for the misstated mpg claims.
"Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors," said Hyundai Motor America President and CEO John Krafcik. "We're going to make this right."
Krafcik blamed the problem on "procedural errors" in the company's fuel economy testing. "We've identified the source of the discrepancies between our prior testing method and the EPA's recommended approach," he said.
Michael Sprague, Kia America's executive vice president for marketing and communications, said the company "really regrets deeply the errors and … we sincerely apologize to all our owners."
As a result, Hyundai-Kia's combined fleetwide fuel economy average will fall from 27 to 26 mpg for the 2012 model year, or about 3 percent. But both companies will still be in full compliance with federal fuel economy requirements, Krafcik said.
He said the issue impacts 35 percent of 2011-13 vehicles sold through October — about 900,000 vehicles. Of those, the mileage estimates of about 580,000 will fall by 1 mpg; 240,000 will see mileage estimates fall by 2 mpg. The reduction is 3 to 4 mpg for the remaining 80,000 vehicles.
Hyundai-Kia on Thursday was printing new window stickers and they will be applied starting today. "We should have this done in a matter of days," Krafcik said.
Customers to be reimbursed
For customers who bought vehicles with the faulty readings, Hyundai will reimburse them for the lower gas mileage.
Dealers will check cars' odometers and calculate how much owners might have saved if the cars achieved the promised gas mileage. Hyundai and Kia will add 15 percent to the dollar total and send debit cards to owners. And they will continue to reimburse customers for as long as they own the vehicles.
An owner who drove 15,000 miles in Florida this year in a car that overstated its fuel economy by 1 mpg would get a refund of about $88, Sprague said.
That figure doesn't include future payments, so at $100 or more per vehicle, the program could easily cost Hyundai tens of millions of dollars.
Both brands will launch new websites to explain the program to customers. Future owners will not be reimbursed.
The EPA said its investigation is ongoing and it could seek to impose civil penalties. Krafcik said the company is fully cooperating.
"Consumers rely on the window sticker to help make informed choices about the cars they buy," said Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation in a statement.
Other federal agencies could investigate, including the Federal Trade Commission for advertising claims.
The EPA declined to comment when asked if any other agencies are involved.
Older models not affected
Hyundai and Kia share the same Korean parent company. U.S. units operate as separate sales and marketing companies, but share a joint research and development arm.
Hyundai-Kia's research arm changed its testing procedure in 2010. The reason that some current models aren't affected is because their window mpg ratings were validated before 2010.
But the company is confident that no older models have discrepancies with their window stickers.
Sung Hwan Cho, president of Hyundai America Technical Center Inc., said the company in 2010 changed testing procedures to calculate road resistance that accidentally overestimated the fuel economy.
It's impossible to say how many sales Hyundai may have gained because of higher mileage numbers, but automakers have touted 40 mpg as a benchmark to draw consumers to showrooms.
Krafcik compared the problem to Hyundai's early years in the U.S. market when it had quality problems and fixed them.
The EPA noted that the only two models since 2000 to see a reduction in vehicle mpg were the 2001 Dodge Ram pickup, which fell by 1 mpg, and a 2012 BMW 328i, which fell by 2 mpg highway/1 city.
Both were isolated instances and not the result of a broad company issue.
About eight months ago, staff at EPA's National Vehicle and Fuel Emission Laboratory in Ann Arbor observed discrepancies between results from EPA testing of a 2012 Elantra and data from Hyundai. EPA expanded its investigation into data for other Hyundai and Kia vehicles.
11-02-12, 05:47 AM
#2
Lead Lap
Something tells me Hyundai and Kia won't be the only ones needing to fess up.
I have to say though, how can you be mad about this when Hyundai/Kia are stepping up the plate so well? I don't think any owner would be mad about getting compensation money for the duration that they own the car.
I have to say though, how can you be mad about this when Hyundai/Kia are stepping up the plate so well? I don't think any owner would be mad about getting compensation money for the duration that they own the car.
11-02-12, 05:57 AM
#3
Something tells me Hyundai and Kia won't be the only ones needing to fess up.
I have to say though, how can you be mad about this when Hyundai/Kia are stepping up the plate so well? I don't think any owner would be mad about getting compensation money for the duration that they own the car.
I have to say though, how can you be mad about this when Hyundai/Kia are stepping up the plate so well? I don't think any owner would be mad about getting compensation money for the duration that they own the car.
11-02-12, 06:22 AM
#4
My son has a '13 Elantra and it never touched 40 MPG.
MPG number is not great around town but does hit 37 or so on the highway.
MPG difference doesn't bother me that much.We bought the car because the family liked the styling.I still would have preferred a new Civic because of the bulletproof quality of the '08 Civic we traded.I just have more confidence in a Civic long term.
MPG number is not great around town but does hit 37 or so on the highway.
MPG difference doesn't bother me that much.We bought the car because the family liked the styling.I still would have preferred a new Civic because of the bulletproof quality of the '08 Civic we traded.I just have more confidence in a Civic long term.
11-02-12, 07:09 AM
#5
Lead Lap
I think we're going to see increased scrutiny amongst car manufacturers with mpg complaints lodged against them. Hyundai/Kia had mpg problems across their entire lineups, but other carmakers with 40mpg claims have had consumers unable to meet those claims for certain models. Even a review of the just-released Ford CMAX stated they were surprised at just how far off their tested-mpg was compared to the epa mpg.
11-02-12, 07:20 AM
#6
Chart
Back in December of 2011, Consumer Watchdog called on the EPA to investigate Hyundai over its fuel economy claims. According to Consumer Watchdog, Hyundai claimed that its Elantra was good for 29 mpg in the city and 40 mpg on highway. The problem the organization had with the claims is that it received a higher than usual number of complaints that real-world mileage was in the mid-20 mpg range.
The EPA did investigate Hyundai for misleading mileage claims as well as Kia, and changes in fuel economy estimates are coming as a result of the investigation. Both Kia and Hyundai will be lowering the fuel economy estimates on the majority of their 2012 to 2013 models after EPA testing discovered discrepancies between its data and the company's data.
Hyundai and Kia admitted to overstating the estimated fuel economy on window stickers of about 900,000 vehicles sold since late 2010. The two automakers will reportedly spend millions of dollars to compensate owners for faulty claims of economy.
Hyundai will also have to retract its widely used claim that it leads the industry with four vehicle models able to get 40 mpg on the highway. That statement will be retracted because estimated highway economy on the 2013 Accent, Veloster, and Elantra are being reduced to below 40 mpg.
Some of the biggest losers include the Hyundai Accent and the all-new, redesigned 2013 Hyundai Santa Fe. The Accent saw its 30/40/33 (city/highway/combined) rating drop to 28/37/31. The Santa Fe Sport (2WD) saw a huge drop in its highway rating, going from 21/31/25 (city/highway/combined) to 20/27/23.
Many of the mileage adjustments take Hyundai models from being class leaders to either middle-of-the-pack or lower.
Overstating fuel efficiency is a significant blunder by the 2 car companies because gas prices are up, and many people are shopping based on fuel economy claims by the manufacturer. The EPA notes that window sticker values have previously been reduced on only two vehicles sense 2000, so that makes Hyundai’s folly even more egregious.
"Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors," said Hyundai Motor America President and CEO John Krafcik. "We're going to make this right."
Krafcik blamed the inaccurate fuel efficiency claims on "procedural errors" in the fuel-economy testing methodology the company used. Hyundai-Kia's combined fleetwide fuel economy average declined from 27 MPG to 26 mpg for the 2012 model year working out to about a 3% reduction.
Krafcik added, "We've identified the source of the discrepancies between our prior testing method and the EPA's recommended approach."
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11-02-12, 10:39 AM
#10
Kia Soul Loses 6mpg hwy
Hyundai and Kia overstated the gas mileage on 900,000 vehicles sold in the past 3 years, a discovery that could bring sanctions from the U.S. government and millions of dollars in reimbursements to car owners.
The inflated mileage was uncovered in an audit of test results by the Environmental Protection Agency, which ordered the Korean automakers to replace fuel economy stickers on the affected cars. The new window stickers will have figures that are 1-to-6 miles per gallon lower depending on the model, the agency said Friday.
"Consumers rely on the window sticker to help make informed choices about the cars they buy," said Gina McCarthy, assistant administrator of the EPA's air-quality office. "EPA's investigation will help protect consumers and ensure a level playing field among automakers."
The EPA's inquiry into the overstated figures is continuing, and the agency would not comment when asked if the companies will be fined or if a criminal investigation is under way.
But the agency said it's the first case in which erroneous test results were uncovered in such a large number of vehicles from the same manufacturer. Only 2 similar cases have been discovered since 2000, and those involved single models.
Hyundai and Kia executives said the higher figures were unintentional errors. They apologized and promised to pay owners of the 900,000 cars and SUVs for the difference in mileage. The payments, which will be made annually for as long as people own their cars, are likely to cost the companies hundreds of millions of dollars.
The EPA's findings come at a bad time for Hyundai and Kia, which have seen explosive sales growth in the U.S. partly because of advertising campaigns that touted gas mileage. Hyundai even poked fun at competitors who promoted special high-mileage versions of their cars, claiming that its cars had high mileage across the model lineup.
The EPA said it began looking at Hyundai and Kia when it received a dozen complaints from consumers that the mileage of their 2012 Hyundai Elantra cars fell short of numbers on the window stickers. Staffers at the EPA's vehicle and fuel emission laboratory in Ann Arbor, Mich., included the Elantra in an annual fuel economy audit.
The audit turned up discrepancies between agency test results and data turned in by Hyundai and Kia, the EPA said. As a result, the 2 automakers will have to knock 1 or 2 miles per gallon off the mileage posted on the window stickers of most of their models. Some models will lose 3 or 4 miles per gallon, and the Kia Soul, a funky-looking boxy small SUV, will lose 6 mpg from the highway mileage on its stickers.
The companies said the mistakes stemmed from procedural differences between their mileage tests and those performed by the EPA
Automakers follow EPA procedures when conducting their own mileage tests, and the EPA enforces accuracy by auditing about 15% of vehicles annually. .
"We're just extremely sorry about these errors," said John Krafcik, Hyundai's CEO of American operations. "We're driven to make this right."
The errors involve 13 models from the 2011 through 2013 model years, including seven Hyundais and 6 Kias. Window stickers will have to be changed on some versions of the following models: Hyundai's Elantra, Sonata Hybrid, Accent, Azera, Genesis, Tucson, Veloster and Santa Fe. Kia models affected include the Sorrento, Rio, Soul, Sportage and Optima Hybrid.
Michael Sprague, executive vice president of marketing for Kia Motors America, said the companies have a program in place to reimburse customers for the difference between the mileage on the window stickers and the numbers from the EPA tests.
The companies will find out how many miles the cars have been driven, find the mileage difference and calculate how much more fuel the customer used based on average regional fuel prices and combined city-highway mileage. Customers also would get a 15 percent premium for the inconvenience, and the payments would be made with debit cards, Sprague said. The owner of a car in Florida with a 1 mpg difference who drove 15,000 miles would get would get a debit card for $88.03 that can be refreshed every year as long as the person owns the car, Sprague said.
If all 900,000 owners get cards for $88.03, it would cost the automakers more than $79 million a year.
For information, owners can go to www.hyundaimpginfo.com or www.kiampginfo.com .
Sung Hwan Cho, president of Hyundai's U.S. technical center in Michigan, said the EPA requires a complex series of tests that are very sensitive and can have variations that are open to interpretation. The companies did the tests as they were making a large number of changes in their cars designed to improve mileage. The changes, such as direct fuel injection into the cylinders around the pistons, further complicated the tests, Cho said.
"This is just a procedural error," he said. "It is not intended whatsoever."
Krafcik said the companies have fixed testing procedures and are replacing window stickers on cars in dealer inventories. Owners can be confident in their mileage stickers now, he said, adding that Hyundai will still be among the industry leaders in gas mileage even with the revised window stickers.
The mileage was overstated on about 1/3 of the Hyundais and Kias sold during the 3 model years, he said.
Through October, Hyundai sold 590,000 vehicles in the U.S., up 30% in 2 years. Kia sold more than 477,000, an increase of almost 60%. Strong warranties and improved styling, technology and quality have vaulted them into serious competition with larger auto companies.
Hyundai and Kia are owned by the same company and share factories and research, but they sell different vehicles and market them separately.
11-02-12, 10:57 AM
#12
Lexus Fanatic
Problem is, with many drivers, the heavier their foot goes down on the gas-pedal, the more they tend to complain about fuel-economy. The EPA figures are not meant to reflect aggressive driving. Weather and climate also plays a big role......all else equal, even with less A/C use, fuel-economy is significantly lower in cold weather because of longer engine/transmission warm-ups and an overall richer air/fuel mixture in the injectors.
Last edited by mmarshall; 11-02-12 at 11:02 AM.
11-02-12, 11:16 AM
#14
Problem is, with many drivers, the heavier their foot goes down on the gas-pedal, the more they tend to complain about fuel-economy. The EPA figures are not meant to reflect aggressive driving. Weather and climate also plays a big role......all else equal, even with less A/C use, fuel-economy is significantly lower in cold weather because of longer engine/transmission warm-ups and an overall richer air/fuel mixture in the injectors.
11-02-12, 11:42 AM
#15
Does the apology and reimbursement even matter? It was able to capitalize on that lie called "procedural errors" and woo folks who would have purchased a Honda/Toyota.
For $88/car, it was able to woo them away. Cheaper than anything.
For $88/car, it was able to woo them away. Cheaper than anything.