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Hyundai And Kia Penalized $350 Million For Overstated MPG Claims

Nearly two years after Hyundai and Kia announced they exaggerated fuel economy numbers for several of their most popular models, the two Korean automakers have paid a heavy penalty for the transgressions. The Department of Justice and Environmental Protection Agency announced a settlement Monday that will cost the two car companies approximately $350 million. The financial sum includes a $100 million fine, the largest ever levied under the Clean Air Act, and about $200 million in forfeited greenhouse-gas emissions credits. At a time when car buyers rank fuel economy as a top concern when they head to dealerships and the federal government has mandated increased efficiency, Attorney General Eric Holder said the settlement should serve as a warning to automakers not to fudge their numbers. "This will send a strong message that cheating is not profitable," he said. The settlement ends a federal lawsuit filed against the automakers in U.S. District Court, but it's important to note that it doesn't end a class-action lawsuit filed on behalf of consumers. A preliminary settlement in that case, based in Los Angeles, was approved last month, but final approval isn't expected until July 2015. Officials with the EPA said the $100 million figure roughly equals the economic benefits the two companies received from exaggerating the mileage claims on the window stickers of new cars. Fuel-efficient boasts helped Hyundai and Kia establish a strong foothold in the U.S. marketplace. Advertisements for the Hyundai Elantra stated the vehicle achieved 40 miles per gallon in highway driving, and helped the car win the prestigious North American Car Of The Year honors at the Detroit Auto Show for its 2012 model. In July 2011, the advocacy group Consumer Watchdog began receiving complaints from consumers that the Elantra and other Hyundai models fell short of their stated mileage claims in real-world driving. The group wrote to the EPA and Hyundai, asking both to investigate. Government officials said Kia had overstated the mileage on its popular Kia Soul crossover by 6 miles per gallon, and more than a dozen overall models were affected. On Monday, EPA administrator Gina McCarthy said the violations were "egregious." Based on the exaggerations, the EPA calculated that Hyundai and Kia had underreported the greenhouse gas emissions of their fleets by about 4.75 metric tons over the estimated lifetime of the vehicles. That figure aided in the $200 million credit forfeiture.

Hyundai opens up European Test Centre at N"urburgring

Anyone who's anyone among automakers tests at the Nürburgring, and the latest to join them is Hyundai. After fifteen months of construction and a €6.6-million investment - just shy of $9M USD - the Korean automaker has finally completed its new trackside testing center that was initially announced back in January.
Hyundai's new European Test Centre encompasses nearly 40,000 square feet of floor space on four levels in a glass and steel building that houses workshops, offices and hospitality areas. Acting as an extension of the company's European R&D center in Rüsselsheim, Germany, the new Nürburgring test center will allow Hyundai to conduct more regular and rigorous testing around the 73 corners and 13 miles of tarmac that make up the famous racetrack - definitely a good thing for a powerhouse brand that still sometimes fumbles when it comes to the dark arts of suspension and steering tuning.

Weekly Recap: Kia leads Korea's quality surge

The rapid rise of Korea's auto brands in the US market has been apparent on the sales charts for several years, and now it's showing up in an area that's just as crucial: quality. Kia and Hyundai earned the highest rankings among mainstream brands in the J. D. Power Initial Quality Study released on Wednesday. The study tracks problems owners report during the first 90 days they own their car. Kia reported 86 problems per 100 vehicles, or fewer than one problem per car sold, to take second in the rankings behind luxury sportscar-maker Porsche (80). Kia's score improved by nearly 20 percent compared with the 2014 study. "The big industry story is Kia," Renee Stephens, vice president of U.S. automotive quality at J.D. Power, said in a video statement, noting Kia's infotainment systems were the key reason for its improved performance. Hyundai was fourth for the second straight year, though its score actually worsened by one, to 95. Even with Hyundai's slight dip, Korean quality increased 11 percent, according to the study, which far outpaced American and European companies' three-percent increases. Japanese brands improved one percent. Hyundai Motor Co. (parent company of the Hyundai and Kia brands) captured four individual vehicle awards, which tied for the most with General Motors, Nissan, and Volkswagen. "The Korean brands have really taken off," Stephens said. "There's movement in the industry, and the patterns are shifting." Another luxury brand, Jaguar (93 problems), slotted in between Hyundai and Kia in third place. Infiniti was fifth, followed by BMW. Chevrolet was the highest domestic brand, taking seventh place, followed by Lincoln, Lexus, and Toyota, which were all well above the industry average of 112 problems per 100 vehicles. OTHER NEWS & NOTES Kirk Kerkorian dead at 98 Kirk Kerkorian, a billionaire activist investor who wielded enormous influence on the Detroit Three car companies in the 1990s and 2000s, died Monday. He was 98 years old. Kerkorian made headlines in 1995 for trying to take over Chrysler – with the help of former chairman Lee Iacocca – before being fended off by Chrysler management. His takeover attempt ultimately pushed Chrysler to be sold to German giant Daimler. He tried to buy Chrysler again in 2007 when Daimler put Chrysler on the market, but Kerkorian fell short and the automaker was sold to private equity firm Cerberus.