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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.

Insider trading ahead of Hyundai-Kia MPG debacle suspected

Reuters is reporting that large-scale insider trading may be at the heart of some particularly fishy stock-selling behavior, just prior to the original announcement about the Hyundai-Kia fuel economy ratings debacle.
On November 1st, Hyundai-Kia shares traded roughly 2.2 million times (the single highest-volume day of the year), and the stock price fell by about four percent. For reference, a standard daily trading volume for the stock in 2012 saw about 600k shares trading hands. On November 2nd, the company made public the bad news about the dropping fuel economy ratings for many of its models. In other words: No one outside of the company (and only a smallish group inside the company, we'd imagine) should have known anything about the impending bad news as of the first day of November. After the announcement, the stock price tanked, as you'd expect, and trading volume was way down as well.
Experts seem fully aware that the whole thing reeks of leaked information and subsequent insider trading. If chicanery on this sort of scale seems wacky to you, you'd be inline with the experts who report to Reuters that the level of trading is absolutely suspicious.

Kia launches 1.0-liter engine in Europe

As emissions regulations get tighter around the world, the automotive industry is seeing a proliferation of small, turbocharged engines to keep up. Kia is hopping into this field, at least in Europe, with its newly announced 1.0-liter turbocharged three-cylinder, and the mill debuts at the upcoming 2015 Geneva Motor Show in the Cee'd GT Line (pictured right). Kia's turbocharged three-cylinder makes 118 horsepower and 127 pound-feet of torque in the Cee'd and goes on sale in the fourth quarter of 2014 across the pond. The Korean brand says that the engine will be offered in more of its products there, but won't announce them until later. The engine is still subject to emissions and fuel economy certification in Europe, but Kia's goal is for it to have 10-15 percent better economy than the current 1.6-liter, direct-injected four-cylinder. To make those goals a reality, the company packs the three-cylinder with technology. Laser-drilled fuel-injection holes provide a more even mixture, and the heads and block have separate thermostats to let them be cooled independently, a decision that allows engineers to tune the temperature of the two parts separately to maximize efficiency. Also, the exhaust manifold is integrated into the design to further lower temperatures. On the Cee'd GT Line, the powertrain gets stop/start, as well. While the Ford Fiesta shows that small engines can work in the US by offering the 1.0-liter EcoBoost with 123 hp and 148 lb-ft of twist, don't expect Kia to try it here anytime soon. Company spokesperson James Hope told Autoblog, "We're always studying the market, but there are no plans at the moment" to bring the mill here. WORLD PRODUCTION PREMIERE FOR KIA'S NEW 1.0-LITRE TURBOCHARGED THREE-CYLINDER 'KAPPA' ENGINE World premiere for Kia's new downsized 1.0-litre T-GDi engine Developed in-house at Kia's Namyang R&D centre Newly-developed laser-drilled injectors enable more efficient combustion Single-scroll turbocharger with electric scavenging system Innovation dual-thermostat cooling for cylinder heads and engine block Kia's all-new 1.0-litre T-GDi (turbo gasoline direct injection) 'Kappa' engine will make its world production debut at the 85th Salon International de l'Automobile in Geneva on 3 March 2015. Kia's new T-GDi Kappa engine embraces the industry trend towards smaller capacity, higher efficiency units which consume less fuel and emit fewer emissions – while still delivering responsive performance.