"This will send kind of a warning to the automakers that if there's a consumer reaction to these fuel economy numbers, that the EPA will act," he said.
John Krafcik, Hyundai's CEO of American operations, said the companies are sorry for the errors. "We're driven to make this right," he said Friday.
Michael Sprague, executive vice president of marketing for Kia Motors America, said the companies have a program in place to reimburse customers for the difference between the mileage on the window stickers and the numbers from the EPA tests.
Dealers will find out how many miles the cars have been driven and figure out the increased cost to owners due to the lower gas mileage.
For example, a customer in Florida whose car got 26 miles per gallon instead of 27 and drove 15,000 miles would wind up using 21.4 more gallons because of the inflated mileage. At a local gas price of $3.59 per gallon, the companies would pay them $76.83. Hyundai and Kia are adding a 15 percent premium for the inconvenience, so the customer would get about $88.
The payments would be made by debit cards that can be refreshed every year as long as the person owns the car, Sprague said.
If all 900,000 owners get $88, it would cost the automakers more than $79 million a year.
Hyundai will have to cut two mpg from the 2012 Elantra's 40 mpg highway mileage because of the EPA audit. The two-wheel-drive 2013 Santa Fe SUV with a 2.4-liter engine and automatic transmission was supposed to get 33 mpg on the freeway, but that will drop to 29. And the 2013 Soul with a 2-liter engine and automatic transmission will lose six mpg from its highway mileage.
Sung Hwan Cho, president of Hyundai's U.S. technical center in Michigan, said the EPA requires a complex series of tests for fuel economy, and results can vary in a number of procedures. "These were just honest procedural errors," Cho said.
Engineers did the tests as the companies were making a large number of changes in their cars designed to improve mileage, and the changes further complicated the tests, Cho said. There are hundreds of test parameters, most of which are spelled out by EPA regulations, but "there's also some points where we also need some interpretation," he said.
Krafcik said the companies have fixed testing procedures and are replacing window stickers on cars in dealer inventories. Owners can be confident in their mileage stickers now, he said, adding that Hyundai will still be among the industry leaders in gas mileage.
Through October, Hyundai sold 590,000 vehicles in the U.S., up 30 percent in two years. Kia sold more than 477,000, an increase of almost 60 percent. Strong warranties and improved styling, technology and quality have vaulted them into serious competition with larger auto companies.
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