Hyundai Motor to be fined for overstated fuel economy

The Transport Ministry on Thursday announced that it would slap fines on Hyundai Motor and Ssangyong Motor for reporting inaccurate fuel mileage ratings for their sports utility vehicles.

Hyundai Motor refuted the findings, citing test results from the Trade Ministry that found they correctly stated the vehicle’s fuel economy.

The Ministry of Land, Infrastructure and Transport’s gas mileage test results suggested that the Hyundai Santa Fe’s reported efficiency of 14.4 kilometers per liter was overstated by 8.3 percent and SSangyong inflated the fuel mileage rating of its CX7 4WD by 10.7 percent.

Based on the Automobile Management Act, the Transportation Ministry can fine Hyundai Motor up to 1 billion won and SSangyong 200 million won. Whether the two carmakers will compensate for the discrepancies remains unclear as there are no legal bindings in the area.

Referring to the results from the Trade Ministry that said Hyundai Motor had not overstated the fuel economy for the Santa Fe, the automaker criticized the government for the discrepancies.

“The conditions based on which tests were conducted differed for each ministry,” the company said.

It also explained that up until 2012, it had reported to the Trade Ministry. The rules, however, were suddenly changed in 2013, and the standards issued by the Transport Ministry were applied to only some domestic and foreign carmakers.

“We are perplexed by the double standards of two ministries,” the company said in its statement, adding that it is at a loss on how to guide its customers.

A Finance Ministry spokesperson admitted that the different results could stir up controversy, saying that it was “regrettable” that the government couldn’t come up with a unified outcome on fuel economy for the same vehicles.

Meanwhile, the verdict is expected to trigger class action suits from consumers who purchased Hyundai’s Santa Fe DM R 2.0 2WD and Ssangyong’s CX7 4WD.

On Wednesday, three owners of the problematic Santa Fe vehicle filed the first suit against the country’s largest automaker asking for some 600,000 won in compensation each.

“The number may increase unless the manufacturers come up with an ideal offer,” a market watcher said.

In 2012, Hyundai and its sister company Kia offered to reimburse up to 100 billion won to more than a million car owners in North America for the inflated mileage reported by “accident.” Earlier this week, Ford Motor decided to compensate 30 South Korean owners for overstated fuel economy, which was the first of its kind in the country.

By Bae Ji-sook and Park Han-na
(baejisook@heraldcorp.com) (hnpark@heraldcorp.com)