DETROIT Dec 23 U.S. units of South Korean
sister companies Hyundai Motor Co and Kia Motors
Corp on Monday said they reached an agreement to pay
a total of $395 million to settle lawsuits filed by owners of
cars affected by the companies' overstatements of fuel economy
The agreement would affect American owners of about 600,000
Hyundai and 300,000 Kia vehicles from the 2011 to 2013 model
In November 2012, the two companies conceded that they
overstated fuel economy by at least a mile per gallon on
vehicles after the U.S. Environmental Protection Agency found
errors for 13 Hyundai and Kia models from the 2011 to 2013 model
Hyundai and Kia both gained bigger shares of the U.S.
new-vehicle market in the past decade, particularly during the
economic downturn of 2008 to 2010 when consumers saw bargains in
their lineups of fuel-efficient and relatively low-priced
The amount each company pays out 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
$210 million, and for Kia the figure is $185 million.
Hyundai estimated that the average lump sum payment would on
average be $320 minus any previous reimbursement payments
Hyundai and Kia sales in the U.S. market have been pressured
by capacity constraints at its North American plants. Hyundai
U.S. sales through November are up 2.2 percent, well below the
8.4 percent gain by the overall U.S. new vehicle industry, while
Kia's U.S. sales have fallen 3.3 percent through November,
according to Autodata Corp.
Brad Benson, president of a Hyundai dealership in South
Brunswick, New Jersey, said the fuel economy issue has not had a
"Hyundai handled the initial settlement well (last fall).
We've had no issues with customers," Benson said on Monday.
Hyundai's share of the U.S. market has fallen to 4.6 percent
this year, from 4.9 percent a year ago, and Kia's U.S. market
share of 3.5 percent is down from 3.9 percent a year ago.
The proposed settlement will go to the plaintiffs of the 53
U.S. lawsuits filed, which were later consolidated. If the
plaintiffs accept the settlement, it will then go up for
approval by the U.S. District Court for the Central District of
The proposed settlement does not affect class-action cases
brought in Canada. Hyundai spokesman Chad Heard in Canada said
Hyundai hopes that a proposed settlement to those cases can be
reached in early 2014.