Liar, Liar, Hyundai Faces Law Suit Over MPG Claims
Industry News

Hyundai is facing significant backlash from South Korean consumers who were misled about the accuracy of the advertised fuel efficiency figures for their vehicles, leading to a class action lawsuit. The country’s transport ministry has accused the company of intentionally exaggerating the fuel efficiency of the Santa Fe model, prompting 1,500 owners of diesel-powered SUVs manufactured between May 2012 and June 2014 to take legal action.

This lawsuit poses a serious threat to Hyundai’s hard-earned reputation, especially considering the intense competition it faces in the domestic market from brands like BMW and Volkswagen. South Korea accounted for 44 percent of Hyundai’s total revenue in 2013.

Unfortunately, this is not the first time Hyundai has been involved in such a controversy. In 2012, the company faced a similar situation in the United States, where it admitted to overstating its vehicles’ economic performance. As a result, Hyundai issued an apology and compensated approximately 900,000 buyers of cars and light trucks in the US with fuel-debit cards. The company had to pay $395 million to settle the lawsuits filed against it in the US.

Hyundai is not the only automaker facing scrutiny in South Korea. Ssangyong Motor Co.’s Korando S SUV has also been found to have overstated its fuel economy, leading the transport ministry to initiate class-action lawsuits against the company. It is anticipated that the fines imposed on Ssangyong will surpass $1 billion.

South Korea has opened up its automobile market to foreign manufacturers, who are now expanding their market share, aided by lower tariffs and the growing demand for high-performance premium vehicles. As a result, Volkswagen has experienced a 34 percent increase in sales, and Audi’s market share has risen by 39 percent in the first five months of 2014. In comparison, Hyundai’s sales only rose by 6.1 percent during the same period, falling short of the company’s 6.4 percent target.

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