Hyundai Moving Fast to Minimize the Impact of the Gas Mileage Errors
Hyundai Motor Group admitted last week that some gas mileage numbers on their vehicles had been overstated.
Their goal now turns to minimizing the impact of the errors that affected about 900,000 vehicles sold in the Uited States between 2010 and 2012.
The South Korean automaker issued a public apology to all of the customers via the major newspapers, while executives were called to Seoul by group chairman Chung Mong-koo to take part in an emergency meeting.
As last weekend approached, Hyundai apologized to the customers affected by the mileage errors discovered by the US Environmental Protection Agency -EPA.
The apology ad that ran in the newspapers cited procedural errors made in testing, with the end result being an average mileage reduction of 3%.
Costs of Hyundai’s gas mileage overstatement
Hyundai has already taken a couple of steps in hopes of lessening the fallout from the error.
All of the mileage stickers on the cars have been changed to reflect the actual numbers, and they have also put in place a reimbursement program that may end up costing about $80 million.
Industry experts feel that it’s inevitable that the Hyundai and Kia brands will face some level of negative backlash. There are even some that feel the whole thing could end up in the courts as part of a large group lawsuit.
Nam Kyung-moon, an analyst at KTB Investment and Securities spoke about how the Hyundai and Kia brands were likely to be negatively affected by the mileage issue, especially since it was found in almost every model in the US lineup.
Choi Joong-hyuk, a researcher at Shinhan Investment spoke about Hyundai has marketed their vehicles based on mileage, and how that is now likely to play a part in how new car buyers view the brand when it comes time to choose.
As troublesome as this issue is for the Korean automakers, most industry people agree that it is not as problematic as the Toyota recall of 2009, where brake problems put driver’s safety at risk.
Seo Sung-moon, an analyst at Korea Investment and Securities spoke about that particular issue, saying that Toyota lost a great deal of trust as they tried to avoid responsibility initially, which led to a perception that they were too slow in fixing the problem.
Kim Pil-soo, professor of automotive studies at Daelim University, stated that he believed a fast response by Hyundai and Kia is what is best advised.
He stated that Hyundai should aim to minimize the impact that the problem will have on US sales, whilst also paying attention to face the attacks of their Japanese rivals who might now smell blood in the water.
Time will only tell how overall sales will be affected, but Hyundai and Kia shares took a hit to start the week, dropping by almost 7%.
Hyundai officials spoke at about the mileage tests performed at the Korean Tech center, stating that the errors may have come as a result of not accurately accounting for real-world conditions in the US.
That seems to make sense as they claim that there are no mileage issues with the cars released to the Korean market.