Hyundai is facing the wrath of customers in South Korea, its home market. A batch of about 1500 customers has sued company for overstating mileage of diesel Powered SUV Santa Fe.
This is a fallout of the statement issued few days back by the transport ministry of South Korea, saying company overstated fuel efficiency of one of its models. Santa Fe affected by this lawsuit are manufactured between May 2012 to June 2014. Hyundai is struggling to cope with an increasing customer preference for German car brands, especially Audi, BMW and Mercedes for supposedly rendering better operational quotient, affecting Compay’s sales resulting in shrinking in market share. Bloomberg.com
Lee Sang Hyun, An analyst at NH Investment & Securities Co. Said, “It’s definitely bad news for the company,” “Although the compensation cost is expected to be relatively small, as it only involves the Santa Fe, we can’t completely rule out the possibility that the government may decide to test and find more vehicles that fail to meet the government’s standards.”
Tests conducted by the Korea Automobile Testing & Research Institute on the diesel-powered Santa Fe, which Hyundai said would run 14.4 kilometers per liter, showed the vehicle’s combined and city mileages were 6.3 percent and 8.5 percent less than stated, respectively, South Korea’s transport ministry said on June 26. This exceeded the 5 percent error limit set by the government, the ministry said.
This is not the first case involving Korean Brand Hyundai in overstating mileage of certain models. In Nov. 2012 in U.S., Hyundai and its affiliate Kia Motors Corp. Apologized for overstating the fuel economy of their vehicles. The companies issued debit cards to buyers of about 900,000 cars and light trucks sold in the U.S. to reimburse them for higher-than-expected fuel costs.
The companies agreed to spend as much as $395 million to settle U.S. lawsuits, making payments totaling as much as $210 million to people who bought 2011 to 2013 model-year vehicles affected by the ratings.