Hyundai agrees to settle U.S. lawsuits over fuel efficiency
LOS ANGELES -- Hyundai has agreed to settle consumer lawsuits stemming from overstated fuel economy ratings for some 600,000 Hyundai vehicles sold in the U.S. market.
Financial terms of the tentative deal were not disclosed in a filing made by consumer attorneys in U.S. District Court in Los Angeles on Tuesday.
It's unclear how much Hyundai will have to pay under the proposed settlement.
Under the deal, consumers who purchased vehicles with overstated fuel economy ratings will be given the option of taking a lump sum settlement payout, or continue with the automaker's debit card reimbursement plan announced in November.
Hyundai Motor America and affiliate Kia Motors America were hit with multiple class action lawsuits after the companies said on Nov. 2 that they had sold some 900,000 vehicles to U.S. consumers with overstated fuel economy claims. Thirty-eight such suits have been consolidated into a single case being handled in federal court in Los Angeles. One such suit says affected consumers should be paid $775 million.
Tuesday's filing said Hyundai had agreed earlier this month to general terms of a settlement. Kia has been invited to join the settlement and is evaluating the settlement proposal, according to the filing.
Bloomberg News reported the settlement earlier Tuesday.
Hyundai Motor America spokesman Chris Hosford declined to comment on the proposed settlement, citing the confidential nature of the settlement negotiations. Kia Motors America spokesman Scott McKee also declined to comment, citing company policy regarding pending litigation.
"Kia Motors America's priority is and will remain making things right for our customers, which is why we are offering to compensate all current and former owners of affected vehicles, using MPG ratings adjustments for the full length of their vehicle ownership," McKee said in an e-mail to Automotive News.
In the Nov. 2 announcement, Hyundai and Kia officials apologized for overstated mileage ratings, blaming flawed internal testing procedures for the errors and lowered the fuel economy ratings for most of their models currently on sale.
The companies promised to give debit cards to compensate current and past owners of the affected vehicles for the extra gasoline they purchased. For example, a hypothetical California owner of a 2012 Hyundai Elantra, whose combined fuel economy rating fell from 33 mpg to 32 mpg, would be paid about $89 after driving the car for 20,000 miles with gas at $4.10 per gallon.
Hyundai said late last month that it had set aside about $225 million to pay for its owner compensation plans. Kia said around the same time that it had earmarked about $187 million.
Under the proposed settlement, affected consumers can opt to take a single lump-sum payment, or choose to continue receiving periodic payments to their debit cards under Hyundai and Kia's current reimbursement program.
Hyundai dealers will be asked to notify eligible customers about their settlement options, and give them fliers when they come to the dealership for service.
Payouts will vary depending on the extent of the mile per gallon overstatement. Original owners of the four Hyundai models previously rated at 40 mpg on the highway -- the Elantra, Accent, Veloster and Sonata Hybrid -- will get a larger payout than owners of vehicles originally rated at less than 40 mpg.
Owners of affected vehicles who bought their car used will get half of what a consumer who bought the same car new would receive under the settlement.
All consumers accepting for a lump sum can opt for a dealer service credit worth 150 percent of their lump sum payment, or a new car rebate voucher worth 200 percent of the lump sum in lieu of a cash payout.
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