Hyundai and Kia have agreed to pay up to nearly $400 million to settle consumer lawsuits related to overstated fuel economy ratings on some 900,000 vehicles sold by the companies in the U.S. market.
The value of Hyundai Motor America’s proposed settlement totals about $210 million, while Kia Motors America agreed to pay up to $185 million, according to statements issued by the companies. The proposed settlements are still subject to court review, which is expected in early 2014, the companies said.
The automakers were hit with dozens of class-action lawsuits after the companies disclosed in November 2012 that they had sold some 600,000 Hyundai and 300,000 Kia vehicles to U.S. consumers with overstated fuel economy ratings.
Hyundai and Kia officials apologized for the overstated mileage ratings and blamed flawed internal testing procedures for the errors.
The mpg revisions affected eight Hyundai and five Kia nameplates from the 2011, 2012 and 2013 model years. They included some of the companies’ best-selling models such as the Hyundai Elantra and Kia Soul. Most vehicles saw their combined MPG ratings fall by 1 or 2 mpg.
About 53 such suits have been consolidated into a single case being handled in federal court in Los Angeles, according to the company’s statements.
The sums translate into an average lump sum payment of about $353 to owners and lessees of the roughly 600,000 Hyundai vehicles, while the approximately 300,000 owners of affected Kia vehicles are eligible for lump sum payouts of about $667 each, the companies said.
“Kia Motors is a responsible company, and the proposed settlement enhances our goal of making things right for our customers by providing new reimbursement options,” John Yoon, attorney for Kia Motors America, said in a statement. “Kia Motors is fully committed to taking care of its customers, and today’s settlement adds flexibility by adding lump-sum payment options to the transparent reimbursement program introduced last year.”
The final amount Hyundai and Kia will have to pay depends how many owners who bought Hyundai and Kia vehicles with overstated fuel economy ratings elect to receive the lump sum payments, the companies said.
Eligible owners can take the payment or continue to participate in a reimbursement program Hyundai and Kia created when fuel economy ratings were restated.
Under the reimbursement program, Hyundai and Kia provided debit cards to compensate current and past owners of the affected vehicles for the extra gasoline they purchased “Customers responded favorably to the original reimbursement program,” W. Gerald Flannery, general counsel for Hyundai Motor America, said in a statement. “Today’s settlement is designed to provide them with an option, again intended to make customers fully whole for Hyundai’s fuel economy ratings restatement.”