In recent years, Korean twins Hyundai and Kia have lain claim to some of the best average fuel efficiency figures in their respective sectors.
That all changed in late 2012 when it was discovered that the two marques had been overstating the EPA mileage figures on a wide range of vehicles. Now, Hyundai Motor Corp. and Kia Motors have announced that $395 million has been set aside to settle a class action lawsuit, reimbursing owners of vehicles bought under the incorrect mileage figures.
Back in November 2012, Hyundai and Kia were investigated by the EPA after customers reported they were unable to achieve gas mileage figures anywhere near the cars' EPA window stickers.
Following this investigation, the EPA deemed that a full 13 models across the 2011, 2012 and 2013 model years were being sold with overstated mileage figures. Both companies apologized unconditionally, and put the discrepancies down to administrative and procedural errors, rather than any deliberate intention.
The companies were ordered by the EPA to amend the window stickers on affected models. Most saw a 1-2 mpg change, but other models--like the Kia Soul--saw changes of up to 6 mpg.
According to The Detroit News, Hyundai and Kia's $395 million settlement affects around 600,000 2011-2013 Hyundai models in North America and around 300,000 Kias from the same period. Hyundai's settlement totals around $210 million, with $185 million from Kia.
The precise figures will vary depending on how owners choose to be reimbursed.
Hyundai and Kia have offered three methods--a straight-up lump sum based on the miles driven by owners and the amount they'd have paid over the correct mileage, plus a 15 percent premium for the inconvenience caused--or a lifetime reimbursement program to cover the additional fuel costs over the ownership term.
If opting for the lump sum, it's estimated that the average Hyundai owner will receive $353 in payouts, while Kia owners are due an average of $667. Lifetime reimbursement options entirely depend on the owners' mileage and their length of ownership.
A third option allows customers to choose their lump sum as a dealership credit--either a 150 percent payout, perhaps to be used towards maintenance work, or a 200 percent credit towards the purchase of a new Hyundai or Kia vehicle.
The proposed settlement is up for review by federal judge in early 2014. Should the settlement be approved, notices will be sent to individual class members.
Hyundai and Kia are letting customers decide which option they'd like to take--but it's clear the companies stand to lose a great deal more if owners choose the lifetime payout and keep their cars for a longer period.
Less clear is the longer-term impact the saga will have on the two marques--and whether consumer confidence has been shaken by the mis-stated mileage.