Hyundai, Kia Settle State Probes Over Misstated Fuel Economy

October 27, 2016 – Hyundai Motor Co. and Kia Motors Corp. agreed to pay $41.2 million to settle state attorneys general probes stemming from overstated fuel-economy claims the South Korean auto makers made several years ago.

The manufacturers settled investigations with 33 states and Washington, D.C., state attorneys general and the companies said Thursday. The largest share of the payout, $3 million, will go to California, the attorney general there said.

Hyundai and Kia restated mileage for vehicles in November 2012 that lowered their fuel economy by one to two miles a gallon. The latest settlement doesn’t contain any admissions of wrongdoing or legal violations.

The settlement follows a $100 million U.S. penalty Hyundai and affiliate Kia suffered in 2014 after the Environmental Protection Agency two years earlier discovered the manufacturers overstated mileage claims for more than a million vehicles.

The vehicles affected represented more than a million Hyundai and Kia 2011-2013 models sold in the U.S. The manufacturers also agreed to pay $200 million in regulatory credits as part of the 2014 settlement with the U.S. Justice Department.

The 2014 settlement was the largest at the time for such lapses. Volkswagen AG this year has agreed to pay up to $15 billion to settle diesel-emissions cheating claims with consumers and regulators, part of an unprecedented government crackdown on car makers for environmental transgressions. The German auto company still faces additional probes and possible penalties from the Justice Department and others.

In addition to the 2014 settlement, Hyundai and Kia previously settled a class-action suit over the mileage claims for nearly $400 million that is subject to an ongoing appeal.

The money Hyundai and Kia are paying in the agreement with state attorneys general disclosed Thursday will settle consumer-protection claims and cover government investigation costs. Hyundai and Kia also agreed to avoid misrepresenting fuel economy in future advertising.

By Mike Spector, The Wall Street Journal
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