Hyunday Motor Co. apologised for overstating the fuel economy of its sport-utility vehicle Santa Fe. The company also offered to pay a settlement of up to 56 billion South Korean won ($54.41 million) in order to resolve a suit against the company, which also targeted five other auto manufacturers.
In July, a group of more than 1 700 customers filed a lawsuit against a total of six auto makers, including Hyundai Motor Co., Ssangyong Motor Co. and four other foreign companies. The plaintiffs claimed that the auto manufacturers have exaggerated the fuel economy of their vehicles.
According to the companys statement, Hyundai Motor Co. said that each customer of its diesel-powered Santa Fe SUV sport utility vehicle is to be compensated with up to 400 000 won ($388.12) for extra fuel costs and inconvenience. This decision was made by the company after the countrys transport ministry discovered the SUVs fuel economy had been exaggerated by as much as 8%.
As explained by one of the companys spokesmen, the compensations are expected to affect around 140 000 vehicles manufactured and sold in South Korea since May 2012. This means the total payout could reach 56 billion won ($54.41 million). In addition, Hyundai Motors Co. shared that its SUVs fuel economy would be adjusted from the initially stated 14.4 kilometres per litre to 13.8 kilometres per litre (32.5 miles per gallon).
Mr. Kim Woong, who is a lawyer at the firm that has been a legal representative of some of the plaintiffs, commented that the reimbursement proposed by Hyundai does not correspond to the demands of his clients, who are seeking damages that range from 900 000 and 3 million South Korean won (between $890 and $2967) each. As reported by the Wall Street Journal, he said: “The proposed amount [from Hyundai] is way too low. We wont drop our lawsuit. Were preparing another group action for about 4,300 customers and will file it with a Seoul court later today.”
Hyundai Motor Co. was 1.09% up to close at 231,000 South Korean won per share today, marking a one-year change of +4.52%. According to the information published on the Financial Times, the 33 analysts offering 12-month price targets for Hyundai Motor Co. have a median target of 290,000, with a high estimate of 330,000 and a low estimate of 251,000. The median estimate represents a 25.54% increase from the last price of 231,000.
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