Hyundai and Kia Violate Clean Air Act
South Korean automakers Hyundai Motors and Kia Motors face the largest penalty for overstating vehicle fuel-economy standards by 1.2 million cars, resulting in a $300 million settlement. The violations concern popular models like the Hyundai Accent, Elantra, and Santa Fe, as well as the Kia Rio and Soul. This incident highlights the importance of accurate fuel efficiency reporting in the automotive industry and the consequences of misleading claims.
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Presentation Transcript
The South Korean automakers, which together make up the world s 5th-largest automotive group, made shocking errors in calculating fuel efficiency.
On Monday, the Justice Department and Environmental Protection Agency (E.P.A.) officials reported on the largest-ever penalty for a violation of the Clean Air Act. The Korean automakers Hyundai Motors and Kia Motors will pay the federal government a combined $300 million as part of a settlement for overstating vehicle fuel- economy standards on 1.2 million cars.
The violations concern the Hyundai Accent, Elantra, and Santa Fe vehicles and the Kia Rio and Soul vehicles.
For years Hyundai and Kia built their brands around the idea that their cars got better mileage than their competitors, a claim they promoted in ads that denigrated less efficient rivals. The E.P.A. said the fuel efficiency standards reported by Hyundai and Kia were off by one to six miles per gallon.
Under the agreement, the automakers will pay $100 million in fines and forfeit an estimated $200 million in greenhouse-gas emissions credits, which auto companies earn by building vehicles with lower emissions than are required by law.
Announced by Attorney General Eric H. Holder Jr. this plan is part of a broader, more aggressive enforcement effort by federal regulators on the auto industry. Analysts said it was meant to send a clear message to automakers that they would be harshly treated for compromising federal rules. Attorney General Holder said, This type of conduct quite simply will not be tolerated,
He was joined by Gina McCarthy who is the Administrator of the Environmental Protection Agency (E.P.A.), who added, we will never rest or waver in our determination to take action against any company that engages in such activities.
Hyundai and Kia must audit their fleets for model years 2015 and 2016 to ensure that vehicles sold to the public conform to the description and data provided to EPA.
Chris Hosford, a Hyundai spokesman said, Hyundai s view is that this was an honest mistake and there was a lack of clarity/broad latitude in EPA rules and guidance that resulted in the issues outlined by the government. Kia has not made a statement yet.
In conclusion we see that the federal govt is making a more concerted effort to make sure companies who are getting subsidies play by the rules and if they do not or try to appear that they are will face heavy fines and lose credibility among consumers.
http://www.nytimes.com/2014/11/04/us/po litics/us-fines-korean-automakers-for- misstating-mileage http://www.washingtonpost.com/national/he alth-science/epa-fines-hyundai-kia-for- underreporting-emissions
