Stung by EPA criticism that its window stickers falsely stated expected fuel economy forand Kia vehicles, the auto maker’s U.S. chief says most customers are satisfied with the reimbursement program to cover extra fuel costs.
Hyundai’s Krafcik talks with journalists at auto show.
LOS ANGELES – A website set up byto offer debit cards for fuel as compensation for erroneous fuel-economy estimates on vehicle window stickers has received about 350,000 inquiries, a Hyundai executive says.
But it will be months before the South Korean auto maker can tabulate the overall cost of issuing the debit cards because that will depend on the amount of fuel each customer consumes, Michael O’Brien, vice president-corporate and product planning forMotor America, tells WardsAuto on the sidelines of the auto show here.
The long-term cost to Hyundai will be even more difficult to calculate, but the auto maker stands by its pledge to cover unexpected fuel costs for the life of the vehicle for every customer.
The issue came to light a month ago, when the Environmental Protection Agency said it found errors in the mileage estimates of 13 Kia and Hyundai vehicles for the ’11-’13 model years.
Affected are some 900,000 vehicles sold in the U.S. through October, plus 172,000 in Canada. The auto maker says it is too early to estimate how many of those vehicle owners will seek debit cards for reimbursement.
At the show, John Krafcik, president and CEO of Hyundai Motor America, leads a press conference with the controversial topic before introducing the Veloster C3 Roll Top concept and all-new 3-row Santa Fe cross/utility vehicle.
“We’ve sent letters to the owners of every affected vehicle,” he says. “We’ve spoken to thousands of them by phone, email and in person at our dealerships, and we’ve already mailed thousands of reimbursement cards in what we believe is an unprecedented program that will reimburse them for as long as they own their cars.”
“I can tell you that 90% of those people who have visited our dealerships for verification of their odometer reading are satisfied with the reimbursement program,” Krafcik adds. “We’re treating this like the serious matter it is.”
Hyundai began reporting average fuel economy for its U.S. fleet in late 2010, when the figure was 25.4 mpg (9.2 L/100 km). Based on the previous, faulty calculations, Hyundai says its overall fuel economy would have improved to 28.3 mpg (8.3 L/100 km) by September of this year.
Based on the corrected calculations, the auto maker reports average fuel economy of 27.5 mpg (8.5 L/100 km), a difference of about 0.4 mpg (0.17 km/L) during the period.
Krafcik says the fuel-economy snafu should have minimal impact on resale values and that Hyundai vehicle sales throughout November have remained robust. The auto maker may finish 2012 with U.S. sales of more than 700,000 units for the first time ever.
O’Brien says HMA operations in the U.S., as well as Hyundai’s technical center in Superior Township, MI, were not involved in the fuel-economy calculations. Instead, that work was performed by Hyundai powertrain-development operations in South Korea.
Asked if any disciplinary action internally is being taken against the responsible employees, O’Brien says he is not aware of any. Says Krafcik: “That’s not for me to decide.”
As a result of the amended window stickers, stated fuel economy drops from 29/40 mpg (8.1-5.8 L/100 km) for the ’11 Elantra to 28/38 mpg (8.4-6.1 L/100 km). Likewise, the stated fuel economy of the ’13 Veloster Turbo with the new 1.6L turbocharged 4-cyl. falls from 25/34 mpg (9.4-6.9 L/100 km) to 24/31 mpg (9.8-7.5 L/100 km).
Krafcik says the overall cost of the reimbursement program is secondary. “I don’t know what the number is going to be, and honestly we haven’t focused on the number as much as, ‘What do we need to do to make it right for our customers.’”
On the product side, Krafcik responds enthusiastically when asked if there is room in the Hyundai lineup for a premium CUV slotted above the front-wheel-drive Santa Fe, which WardsAuto reported in June.
“It’s certainly something we’re looking at,” he tells journalists. “We’ve got a great rear-wheel-drive platform (for the Genesis). We’re going to show in Detroit (in January) a hint at the design language we will bring forward for Genesis in the future. Personally, I would love to put a crossover into that.”
Krafcik sees premium CUVs as a “very rich segment” of the market. “If you look at where some of the premium brands are going and where much of their sales growth is coming from, it’s on the CUV side.”