Mpg errors found for Kia, Hyundai

— Hyundai and Kia overstated the gas mileage on most of their models for the past three years in a blunder that will result in revisions to window stickers and has the potential for further action from the U.S. government.

The automakers are controlled by one South Korean company. Company spokesmen said owners of the 13models affected will receive compensation, which likely would result in hundreds of millions of dollars in payments, since about 900,000 vehicles are involved.

Because of the inflated mileage, discovered during an audit by the Environmental Protection Agency, the automakers must change window stickers to reduce fuel-economy figures, 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 said its inquiry into the errors 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 EPA said it’s the first case in which erroneous test results were uncovered for a large number of vehicles from the same manufacturer. Only two similar errors have been discovered since 2000, and those involved single models.

Hyundai and Kia executives apologized for the errors and said they were unintentional.

Automakers follow EPA procedures to do their own mileage tests, and the EPA enforces accuracy by auditing about 15 percent of vehicles annually.

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 compact cars fell short of numbers on the window stickers. Employees at the EPA’s vehicle and fuel emission laboratory in Ann Arbor, Mich., included the Elantra in an annual audit that focused on cars that lead their market segments in mileage.

The audit turned up discrepancies between agency test results and data turned in by Hyundai and Kia, the EPA said.

As a result, the two automakers will have to knock 1 or 2 miles per gallon off the mileage posted on most of the models’ window stickers. Some models will lose 3 or 4 miles per gallon, and the Kia Soul, a small sport utility vehicle, will lose 6 mpg from the highway mileage on its stickers.

Hyundai and Kia share some factories and research, but they sell different vehicles and market them separately. The automakers said the mistakes stemmed from procedural differences between their mileage tests and those performed by the EPA.

“In an industry where reputation is so important, this will undoubtedly give both car makers ugly black eyes,” said John O’Dell, an editor for auto research firm Edmunds.com. “In our reviews we’ve pointed out that we can’t come anywhere close to getting the mileage they claim.”

The changes affect models from the 2011 through 2013 model years. Window stickers will have to be changed on some versions of Hyundai’s Elantra,Sonata Hybrid, Accent, Azera, Genesis, Tucson, Veloster and Santa Fe models, as well as the Kia Sorrento, Rio, Soul, Sportage and Optima Hybrid.

Michael Sprague, executive vice president of marketing for Kia Motors America, said the companies will 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 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.

More information for owners may be obtained at hyundaimpginfo.com or kiampginfo.com.

Information for this article was provided by Alan Ohnsman of Bloomberg News.

Business, Pages 29 on 11/03/2012

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