Fuel Efficiency
SEOUL, Feb. 24 (Yonhap) – Hyundai Motor Co., South Korea’s No. 1 carmaker, may have to pay approximately 100 billion won (US$92.8 million) to consumers in its home market for exaggerating the fuel efficiency of its diesel-powered Santa Fe sport utility vehicle (SUV), the government said Monday.
According to the Ministry of Land, Infrastructure and Transport, the two-liter engine, two-wheel-drive model of the popular SUV did not meet its reported mileage. The carmaker has appealed the results and asked for another test, the results of which are expected late next month.
Hyundai claimed the SUV can travel 14.4 kilometers on a liter of diesel fuel, but tests conducted by the Korea Transportation Safety Authority showed it had close to 10 percent less fuel efficiency. This exceeds the 5 percent permissible error limit set by the government for vehicle mileage.
The carmaker countered that an earlier test carried out by the Ministry of Trade, Industry and Energy showed the Santa Fe meeting its stated fuel efficiency claims.
“Because of the request by Hyundai and due to the different test results, the ministry has opted to test the car again under more stringent conditions with three separate cars being checked instead of just one,” an official said.
He, however, said that if the SUV fails again, the government will advise the company to take action that mirrors the settlement reached in North America.
Hyundai paid around 500 billion won (US$467 million) to US and Canadian consumers for exaggerating the fuel economy of some of its vehicles in those countries. In South Korea, however, the law regarding indemnity for advertising incorrect mileage is not clear. For now, the Seoul government plans to advise Hyundai to compensate consumers who bought the diesel-powered SUV.
The model has been on sale in the country since May 2012.
“The size of the compensation will be determined by calculating the difference between the actual mileage of the car with what was claimed by Hyundai,” the official said. He speculated that the sum could reach 1.32 million won (US$1,232) per person.
In addition to the indemnification, Hyundai can be fined 1 billion won (US$933,620) for incorrect reporting.
Authorities said that besides the Santa Fe, Ssangyong Motor Co.’s Korando Sports four-wheel-drive AT6 model has also been found to have exaggerated mileage.
In the event that the second test proves Hyundai got the mileage wrong, it could find itself facing public backlash that can affect sales, industry observers said.
Despite speculation, Hyundai expressed confidence that the second test will validate its mileage claim for the Santa Fe, although it declined to say what action it would take if it was wrong about the SUV’s fuel efficiency.
The government, which in the past only checked fuel efficiency on commercial vehicles, started expanding its testing to cover passenger cars from 2012.
The transportation ministry said that it plans to conduct revised tests on more than a dozen vehicles sold in the country this year to make certain carmakers are not giving false information to consumers. Both South Korean and foreign carmakers will be checked in the upcoming tests, including the Kia Soul, Toyota Prius hybrid electric vehicle, and Audi A6 3.0-liter TDI models.