Hyundai and Kia: to pay US govt $100million over fuel economy claim

Hyundai and Kia agreed to pay $100 million Monday to settle a US government investigation of exaggerated fuel efficiency on 2012 and 2013 car models sold in the United States by the South Korean automakers.

The US Department of Justice said it marked the largest civil penalty ever secured under the four-decade-old Clean Air Act.

“This will send a strong message that cheating is not profitable,” said Attorney General Eric Holder.

The settlement, described as “historic” by the US Environmental Protection Agency (EPA), involved the sale of nearly 1.2 million vehicles that will emit approximately 4.75 million metric tons of greenhouse gases, above and beyond what the automakers certified to EPA.

“Businesses that play by the rules shouldn’t have to compete with those breaking the law,” said EPA Administrator Gina McCarthy.

“This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact.”

The agreement requires Hyundai to adjust about a quarter of Hyundai 2011-13 model year vehicles, reducing their combined city/highway fuel economy by one to two miles per gallon, Hyundai said in a statement.

In addition to paying a $56.8 million civil penalty, Hyundai agreed to forgo the use of approximately 2.7 million greenhouse gas (GHG) emission credits, representing the difference between the original emissions pledge and the newly adjusted one.

The automaker also agreed to have an independent certification test group oversee its fuel economy testing, training, data management and reporting in the future.

“Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of its investigation,” said David Zuchowski, president and CEO of Hyundai Motor America.