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Old 11-02-2012, 09:50 AM   #1
quentinberg007
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Default Hyundai, Kia admit exaggerated mileage claims, will compensate owners

http://www.autoblog.com/2012/11/02/h...-compensate-o/


Hyundai and Kia are lowering the fuel economy estimates on a majority of 2012 and 2013 models. The Detroit News reports a probe by the Environmental Protection Agency has found both manufacturers guilty of posting false fuel economy estimates on vehicle window stickers since late 2010. The companies will spend millions of dollars compensating the owners of some 900,000 vehicles sold under the claims. This marks the largest spate of fuel economy reductions in the history of the automotive industry. Prior to this probe, only two vehicles have seen their window sticker fuel economy values reduced since 2000.

Hyundai aggressively advertised the fact that the brand offers four models that boast 40 mpg, but that claim is no longer true. The 2013 Hyundai Accent, Veloster and Elantra will now see their EPA estimates fall to either 37 or 38 miles per gallon on the highway. The report quotes Hyundai CEO John Krafcik as saying, "We're extremely sorry about these errors" and blamed "procedural errors" in the company's fuel economy testing as the reason behind the discrepancy.

All told, 35 percent of 2011-2013 models sold through October will see a reduction. Of those, 580,000 will see a drop of around 1 mpg, while 240,000 units will have their EPA figures cut by 2 mpg. The remaining 80,000 will drop by 3 to 4 mpg. Owners will be compensated based on their vehicles' odometer readings, and both automakers will contribute an additional 15 percent over the dollar value. The funds will be awarded via prepaid debit cards. For an owner who drove 15,000 miles, an adjustment of 1 mpg would result in a refund of around $88.

For some time there has been suspicion that the Korean automakers' fuel economy claims were too optimistic, which most recently led to a class-action lawsuit filed in July of this year by an organization called Consumer Watchdog on behalf of Elantra owner Louis Bird of California.



I expect the flood gates are about to open for a lot of manufacturers because there are a lot of cars out there with inflated numbers, IMO.
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Old 11-02-2012, 10:00 AM   #2
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I want to see substantial corporate fines! It's not just about the $ to owners for the mileage. It's about sales cannibalized from other manufacturers due to these false MPG claims.
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Old 11-02-2012, 10:35 AM   #3
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I want to see substantial corporate fines! It's not just about the $ to owners for the mileage. It's about sales cannibalized from other manufacturers due to these false MPG claims.
Is 1-3 MPG enough to change someones mind about buying a $20,000 car?
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Old 11-02-2012, 10:46 AM   #4
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Originally Posted by 2.5RSMatt View Post
Is 1-3 MPG enough to change someones mind about buying a $20,000 car?
Never under-estimate the stupidity of the American consumer.
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Old 11-02-2012, 10:50 AM   #5
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Originally Posted by 2.5RSMatt View Post
Is 1-3 MPG enough to change someones mind about buying a $20,000 car?
Absolutely. 40 MPG is the benchmark people look for when buying a new compact. A lot of people went to Hyundai because they had the "best MPG in the class". This is like how some products will sell much better at $199.99 then they would at $205. $199.99 is "less than $200" so it becomes much easier (mentally) for people to swallow.

Hyundai advertised the heck out of the 40MPG number because it brought people onto the lots.
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Old 11-02-2012, 10:52 AM   #6
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Yep. People on the Veloster forums have been rightly pissed about this for a while. Glad we're gonna be compensated.
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Old 11-02-2012, 10:56 AM   #7
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Yep. People on the Veloster forums have been rightly pissed about this for a while. Glad we're gonna be compensated.
I would be pretty pissed that the compensation was only covering the current odometer reading, then you are are basically stuck with the poor MPG and no further compensation for the rest of the time you own the car.
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Old 11-02-2012, 11:06 AM   #8
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Originally Posted by REX8 View Post
Never under-estimate the stupidity of the American consumer.
It's not about stupidity. Even for a completely rational consumer, it's the "marginal" feature which sways their purchase decision. The auto marketplace is extremely competitive, meaning small differences in products equate to large differences in sales.

A consumer can make a reasonable evaluation of their opinion of most of the car in the showroom and on the test drive. How comfortable are the seats? do they like the sight-lines? Does it merge decently into freeway traffic? Is it too noisy? All questions which are relatively easy for a consumer to answer in a short time.

It's questions like reliability and fuel economy which the informed consumer must seek outside information from organizations like the EPA and Consumer Reports. One can't objectively measure their own real world fuel economy on a test drive. This is what makes Hyundai's gaming of the fuel economy numbers so egregious, and why shikataganai is right to want corporate fines.

A cynical business person can see what Hyundai has done and say "OK, they gambled and got caught, but they only lost what they wagered in the gamble, so it makes sense to gamble because we'll gain every time we don't get caught." Not the kind of behavior we want to incentivise.
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Old 11-02-2012, 11:09 AM   #9
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I would be pretty pissed that the compensation was only covering the current odometer reading, then you are are basically stuck with the poor MPG and no further compensation for the rest of the time you own the car.
As I understand it, it's a yearly adjustment, not a one-time compensation.
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Old 11-02-2012, 11:13 AM   #10
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Absolutely. 40 MPG is the benchmark people look for when buying a new compact. A lot of people went to Hyundai because they had the "best MPG in the class". This is like how some products will sell much better at $199.99 then they would at $205. $199.99 is "less than $200" so it becomes much easier (mentally) for people to swallow.

Hyundai advertised the heck out of the 40MPG number because it brought people onto the lots.
Interesting. I guess I'm more of an emotional buyer than a stickler for MPG, HP, or whatever numbers. For those who see a car as an appliance I understand that numbers are everything.
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Old 11-02-2012, 11:13 AM   #11
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Originally Posted by XanRules View Post
As I understand it, it's a yearly adjustment, not a one-time compensation.
Ah, that is much better.

Quote:
Originally Posted by 2.5RSMatt View Post
Interesting. I guess I'm more of an emotional buyer than a stickler for MPG, HP, or whatever numbers. For those who see a car as an appliance I understand that numbers are everything.
Even enthusiasts can be emotional about MPG. Just check some of the huge MPG threads for the new Impreza
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Old 11-02-2012, 11:18 AM   #12
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I would be pretty pissed that the compensation was only covering the current odometer reading, then you are are basically stuck with the poor MPG and no further compensation for the rest of the time you own the car.
As someone else mentioned, it's for however long the owner owns the car.

Quote:
...Hyundai and Kia executives apologized for the errors, said they were unintentional, and promised to pay the owners of 900,000 cars and SUVs for the difference in mileage. The payments, which will be made annually for as long as people own their cars, are likely to cost the companies hundreds of millions of dollars.

Read more: http://www.cp24.com/world/epa-finds-...#ixzz2B4wphxLr
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Old 11-02-2012, 11:19 AM   #13
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I didn't buy mine for the MPG exclusively, but it's not like it wasn't a small factor in my decision.

I also hate being lied to.
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Old 11-02-2012, 11:24 AM   #14
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This is pathetic and embarrassing. It's the "whatever it takes to win" culture in Korea at work. No one will believe anything H/K says for a very long time, be it fuel economy, power figure, performance numbers, etc. They completely destroyed their credibility.

It's like politics. The worst kind of bad news is the one that enforces the negative stereotype that people already have about you.
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Old 11-02-2012, 11:31 AM   #15
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I expect the flood gates are about to open for a lot of manufacturers because there are a lot of cars out there with inflated numbers, IMO.
I hope this prompts Nissan to do something about the Juke's numbers.
Poor mileage is by far the number one topic on Juke forums.
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Old 11-02-2012, 11:34 AM   #16
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Originally Posted by 2.5RSMatt

Is 1-3 MPG enough to change someones mind about buying a $20,000 car?
Sure does. Especially how competitive the sub-compact and mid-size market is. For people who don't have any brand loyalty, cross-comparing two models that are packaged the same for their needs, but one car gets, lets say, 3 mpg better, this is a no brainer. Especially today where mpg is critical, 1-3 or even 6mpg difference in a daily commuter is huge. The mass majority treat these cars as appliances. I would be less concerned if this was the $40k, 60k or 80k+ car market, but the sub-compact and mid-size market is about value.

For example, many people who don't need AWD, rule out the Impreza because of its 36mpg hwy rating vs other comparable cars that get 3-5mpg better mpg. But if the difference is only 2-3mpg, that could sway many decisions.
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Old 11-02-2012, 11:45 AM   #17
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Originally Posted by quentinberg007

I expect the flood gates are about to open for a lot of manufacturers because there are a lot of cars out there with inflated numbers, IMO.
You might be right. This may open a huge can-of-worms especially when the EPA admitted fault.
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Old 11-02-2012, 11:46 AM   #18
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Originally Posted by gpshumway View Post
A consumer can make a reasonable evaluation of their opinion of most of the car in the showroom and on the test drive. How comfortable are the seats? do they like the sight-lines? Does it merge decently into freeway traffic? Is it too noisy? All questions which are relatively easy for a consumer to answer in a short time.
Those are the things consumer "should" be considering when deciding which $20,000 car is for them. Not a small MPG difference that results in a marginal increase or decrease in fuel costs over the ownership period of the car. My opinion was, if, for example, you like the Accord more (you think it drives better, etc.), but you bought the Hyundai simply because it was rated at 1-2 more MPG on the highway, you're silly, IMHO.

The rest of your post appears to be trying to convince me that people do in fact decide based on even small fuel mileage differences, etc.

I never said they didn't...my point, in fact, inferred that I think they do. I only said that practice was silly. Further, never once did I even hint that Kia et al. shouldn't be punished, IF indeed it was them "gaming" and not a mistake in protocol.


For instance, I agree with this post:

Quote:
Originally Posted by ocellaris View Post
Absolutely. 40 MPG is the benchmark people look for when buying a new compact. A lot of people went to Hyundai because they had the "best MPG in the class". This is like how some products will sell much better at $199.99 then they would at $205. $199.99 is "less than $200" so it becomes much easier (mentally) for people to swallow.

Hyundai advertised the heck out of the 40MPG number because it brought people onto the lots.
But that doesn't mean I don't think said people are silly for being so attracted to a $199.99 product vs. a $205.00 product.

Last edited by REX8; 11-02-2012 at 12:03 PM.
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Old 11-02-2012, 11:47 AM   #19
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Originally Posted by Len View Post
This is pathetic and embarrassing. It's the "whatever it takes to win" culture in Korea at work. No one will believe anything H/K says for a very long time, be it fuel economy, power figure, performance numbers, etc. They completely destroyed their credibility.

It's like politics. The worst kind of bad news is the one that enforces the negative stereotype that people already have about you.
"Whatever it takes to win" is more widespread than just Korea. That's high end western capitalism man. They just have even less domestic regulation in Korea than they do here.
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Old 11-02-2012, 11:58 AM   #20
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Those are the things consumer "should" be considering when deciding which car is for them. Not a small MPG difference that results in a marginal increase or decrease in fuel costs over the ownership period of the car.
I disagree. 3 mpg may not seem like a lot, but on a 10 gallon tank that's an extra 30 miles (an extra day of commuting for a lot of people), on a 15 gallon tank it's 45 miles (that's 2 more days commuting to/from work for me).
Sure it's a minor inconvenience to have to fill up a day or two early, but those days add up over the course of 1-5 years, especially if someone is on a budget (which a lot of people looking at $20k cars are).
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Old 11-02-2012, 12:06 PM   #21
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I disagree. 3 mpg may not seem like a lot, but on a 10 gallon tank that's an extra 30 miles (an extra day of commuting for a lot of people), on a 15 gallon tank it's 45 miles (that's 2 more days commuting to/from work for me).
Sure it's a minor inconvenience to have to fill up a day or two early, but those days add up over the course of 1-5 years, especially if someone is on a budget (which a lot of people looking at $20k cars are).
OK, but the majority of cars will see a 1 mpg decrease (580k) , followed second by those with a 2 mpg decrease (240k).
Only 80k will get a 3 mpg degrease.

At 40 MPG vs. 38, that's 15 gallons of gas a year at 12,000 miles/year. At $5/gal. gas:

$75/year for an average driver.

<$38/year for the majority of their cars.

Sorry, but $38 a year? That's a deciding factor?

If so, you shouldn't be buying a $20k car, IMHO of course.

Last edited by REX8; 11-02-2012 at 12:21 PM.
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Old 11-02-2012, 12:32 PM   #22
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So the manufacturer, not the EPA, does the testing for the numbers on the window sticker?

--kC
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Old 11-02-2012, 12:57 PM   #23
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So the manufacturer, not the EPA, does the testing for the numbers on the window sticker?

--kC
I always thought the EPA certified the cars. However, I think I read somewhere recently that I was mistaken.

Maybe they just have to have an "approved" testing plan/equipment in place? Send an inspector out to check their dyno and sign on the line?
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Old 11-02-2012, 12:57 PM   #24
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So the manufacturer, not the EPA, does the testing for the numbers on the window sticker?

--kC
Yup, the EPA tests only a sample each year to keep the manufacturers honest.
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Old 11-02-2012, 01:06 PM   #25
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OK, but the majority of cars will see a 1 mpg decrease (580k) , followed second by those with a 2 mpg decrease (240k).
Only 80k will get a 3 mpg degrease.

At 40 MPG vs. 38, that's 15 gallons of gas a year at 12,000 miles/year. At $5/gal. gas:

$75/year for an average driver.

<$38/year for the majority of their cars.

Sorry, but $38 a year? That's a deciding factor?

If so, you shouldn't be buying a $20k car, IMHO of course.
The bigger problem is the credibility issue, not the actual monetary hit. Hyundai has been touting "best in class" MPG numbers in multiple areas, this draws a lot of people to the cars and certainly helped them sell more vehicles than if they had "slightly above average" MPG numbers. "40 MPG" sells a lot more easily than 38 MPG (Elantra). Heck Hyundai even went out of their to note that ALL Elantras got 40 MPG and you didn't have to buy the special "aero package" like other compacts.

Those best in class numbers are one of the top reasons Hyundai is doing so well in the US for the last few years. People like to buy the best.

Last edited by ocellaris; 11-02-2012 at 01:28 PM.
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