SEOUL Nov 22 U.S. consumers have become less
willing to buy cars from Hyundai Motor Co and Kia
Motors Corp since the South Korean automakers
admitted overstating the fuel economy of some of their vehicles,
data from Edmunds.com showed.
Hyundai and Kia earlier this month admitted they had
overstated the fuel efficiency ratings on more than 1 million
recently sold vehicles in the United States and Canada, tainting
the reputations of two carmakers that had centred their
marketing campaigns on claims of superior mileage. The news has
driven their share prices down sharply.
The "purchase intent" for Hyundai's top-selling Elantra
compact fell to 6.3 percent as of Nov. 18 from 6.7 percent on
Oct. 28, according to the data from Edmunds.com, an auto
consultant and consumer website.
The Elantra is one of four models that were falsely touted
as "40-mile-per-gallon" cars. The other three models - Hyundai's
Veloster and Accent and Kia's Rio - also suffered declines in
Kia's Soul saw the largest fall in purchase intent, down 1.9
percentage points to 7.3 percent from 9.2 percent. Fuel economy
for the Soul was overstated by 6 miles per gallon on highways,
the biggest overstatement among the vehicles involved.
"In the U.S., Hyundai in particular has made a media and
consumer 'talking point' of the number of 40-miles-per-gallon
vehicles it sells and how well it sells those models, so this
development has been considerably embarrassing," Bill Visnic, a
senior editor at Edmunds.com, told Reuters by email.
He said "purchase intent" is highly correlated with
purchasing a model within the next three months.
On Nov. 2, Hyundai immediately apologised and agreed to
compensate owners for the additional fuel costs, but Visnic said
the cost could increase given lawsuits over against the false
"Also, there could be a cost in future business as
this development may have a direct impact on Hyundai's
credibility with some U.S. buyers," Visnic said.
Moody's Investors Service previously estimated that the
automakers' compensation plan would cost them $100 million a
year until the cars are scrapped but has not estimated potential