Hyundai And Kia Still Dealing With 2012 Fuel Economy Rating Issue

Hyundai and Kia’s November 2012 fuel ratings kafuffle is taking another step forward.

Hyundai Motor America (HMA) and Kia Motors America (KMA) announced Dec. 23 that the Hyundai Group has entered into an agreement with current and former owners and lessees of vehicles affected by the automaker’s November 2012 restatement of fuel economy ratings.

Both Hyundai Motor America and Kia Motors America are part of the same Korea-based Hyundai Group.

The adjustment affected approximately 27 percent of Hyundai 2011-13 model year vehicles, reducing their combined city/highway fuel economy by 1-2 mpg.

Hyundai said while the settlement agreement is valued at up to approximately $210 million, that number is dependent on how many customers elect to participate in the settlement’s one-time lump sum payment option or remain in the lifetime reimbursement program Hyundai introduced at the time of the restatement.

On Kia’s side, the company said the adjustment affected approximately 300,000 2011-13 model year Kia vehicles and, like in Hyundai’s case, while the proposed settlement agreement is valued at up to approximately $185 million, the final number will be determined by the number of customers that elect to participate in one of the settlement’s lump-sum payment options or remain in the lifetime reimbursement program KMA introduced at the time of the restatement, which reimburses based on actual fuel expenses.

At the time of the restatement in 2012, Hyundai and Kia provided a lifetime reimbursement program to cover the additional fuel costs associated with the rating change – plus a 15 percent premium in acknowledgment of the inconvenience to customers.

Affected owners and lessees are compensated based on their actual mileage and the fuel costs for the region in which they live.

“Customers responded favorably to the original reimbursement program,” said W. Gerald Flannery, general counsel of Hyundai Motor America. “Today’s settlement is designed to provide them with an option, again intended to make customers fully whole for Hyundai’s fuel economy ratings restatement.”

To address plaintiffs’ claims including the requirement to return to a dealership for mileage verification, which plaintiffs felt could deter participation in the reimbursement program, Hyundai and Kia agreed to add a lump sum payment option.

The proposed cash lump sum amount, which varies by vehicle model and ownership type, will result in an average estimated payment of $353 to Hyundai owners and lessees and $667 in Kia’s side.

For example, an owner of a 2012 Elantra would receive a lump sum payment of $320 minus any previous reimbursement payments.

Affected Hyundai and Kia owners may elect the one-time lump sum cash payment or remain in the automaker’s lifetime reimbursement program; the choice is theirs. Consumers can also elect other options, such as a dealership credit of 150 percent of the lump sum cash payment amount, or a credit of 200 percent of the cash amount toward the purchase of a new Hyundai or Kia vehicle.

“Hyundai’s and Kia’s willingness to create a way for its customers to receive all of their future extra fuel expenses in a lump sum shows they are serious about making things right for their customers,” said Rob Carey, a Hagens Berman partner working on the case. “Hyundai stepped up – and its customers will now get a full recovery without the inconvenience of repeated dealership visits and paperwork.”

The Hyundai Group said the Court is expected to review the proposed settlement for preliminary approval in early 2014. Assuming preliminary approval is granted, notices will be sent to individual class members.

Initial details of the settlement are available at www.hyundaimpginfo.com and www.KiaMPGinfo.com. A more in-depth website dedicated to the settlement will be established following preliminary approval by the Court.