In the aftermath of one of the largest “overstated fuel economy claims” in U.S. automotive industry, South Korea’s Kia Motors has announced that they will set aside 200 billion Korean won ($187.13 million), in order to compensate owners that purchased their vehicles during the affected model years.
Kia Motors, and their parent company Hyundai Motors (a part of the Hyundai Group) finally conceded last November that they had overstated their fuel economy claims on their respected vehicle lineups. Although most of them were only a couple of miles per gallon off of the actual mileage, the Kia Soul was by far the most affected. The 2012 Kia Soul had an EPA-estimated 27/36…those numbers have been adjusted to 27/30 (these numbers are for the 1.6L inline four-cylinder engine that that’s found in the base model). In any event, over 1 million vehicles sold in the United States and Canada had false mileage claims on their window stickers.
While the amount of money that Kia has set aside may seem like a tremendous amount, it pales in comparison to what Hyundai has set aside…over 240 billion won, or $225 million dollars. In all, they’ve set aside over $412 million dollars thus far to deal with what they have settled with the owners, who have surprisingly not returned their vehicles back to the dealerships in droves.
It’s sad to see the fast-rising Korean automakers fall from grace so quickly. I personally recall these two being the topic of many conversations on how they were poised to become Toyota’s biggest threat for the coveted best-selling automaker, rising through the ranks of the industry faster than any automaker in recent history, perhaps ever. Nowadays, thanks to the stronger currency (which is also affecting their Japanese counterparts) and the aforementioned crisis, Kia has seen their operating profit slashed by 51 percent. They’ve gone on record as saying that they predict that 2013 will be a “difficult year.” How this will affect their overall sales and reputation in the long term remains to be seen.
Photo Credit: Kia Motors