March 25, 2023

E.P.A. Finds Hyundai and Kia Overstated Gas Mileage

Because of the inflated mileage, discovered during an audit by the Environmental Protection Agency, the Korean automakers must retrofit the window stickers on the cars, reducing their fuel economy figures by one-to-six miles per gallon depending on the model, the agency said Friday.

“Consumers rely on the window sticker to help make informed choices about the cars they buy,” said Gina McCarthy, assistant administrator of the EPA’s air-quality office. “EPA’s investigation will help protect consumers and ensure a level playing field among automakers.”

The EPA said its inquiry into the errors is continuing, and the agency would not comment when asked if the companies will be fined or if a criminal investigation is under way. But the EPA said it’s the first case in which erroneous test results were uncovered in a large number of vehicles from the same manufacturer. Only two similar errors have been discovered since 2000, and those involved single models.

Hyundai and Kia executives apologized for the errors, said they were unintentional, and promised to pay the owners of 900,000 cars and SUVs for the difference in mileage. The payments, which will be made annually for as long as people own their cars, are likely to cost the companies hundreds of millions of dollars.

Automakers follow EPA procedures to do their own mileage tests, and the EPA enforces accuracy by auditing about 15 percent of vehicles annually.

The EPA said it began looking at Hyundai and Kia when it received a dozen complaints from consumers that the mileage of their 2012 Hyundai Elantra compact cars fell short of numbers on the window stickers. Staffers at the EPA’s vehicle and fuel emission laboratory in Ann Arbor, Mich., included the Elantra in an annual audit that focused on cars that lead their market segments in mileage.

The audit turned up discrepancies between agency test results and data turned in by Hyundai and Kia, the EPA said. As a result, the two automakers will have to knock one or two miles per gallon off the mileage posted on most of the models’ window stickers. Some models will lose three or four miles per gallon, and the Kia Soul, a funky-looking boxy small SUV, will lose six mpg from the highway mileage on its stickers.

Hyundai and Kia are owned by the same company and share factories and research, but they sell different vehicles and market them separately. The companies said the mistakes stemmed from procedural differences between their mileage tests and those performed by the EPA.

“We’re just extremely sorry about these errors,” said John Krafcik, Hyundai’s CEO of American operations. “We’re driven to make this right.”

The changes affect 13 models from the 2011 through 2013 model years, including seven Hyundais and six Kias. Window stickers will have to be changed on some versions of Hyundai’s Elantra, Sonata Hybrid, Accent, Azera, Genesis, Tucson, Veloster and Santa Fe models, as well as the Kia Sorrento, Rio, Soul, Sportage and Optima Hybrid.

Michael Sprague, executive vice president of marketing for Kia Motors America, also apologized and 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.

The companies will find out how many miles the cars have been driven, find the mileage difference and calculate how much more fuel the customer used based on average regional fuel prices and combined city-highway mileage. Customers also would get a 15 percent premium for the inconvenience, and the payments would be made with debit cards, Sprague said. The owner of a car in Florida with a one mpg difference who drove 15,000 miles would get would get a debit card for $88.03 that can be refreshed every year as long as the person owns the car, Sprague said.

If all 900,000 owners get cards for $88.03, it would cost the automakers more than $79 million a year.

For information, owners can go to or .

Sung Hwan Cho, president of Hyundai’s U.S. technical center in Michigan, said the EPA requires a complex series of tests that are very sensitive and can have variations that are open to interpretation. The companies did the tests as they were making a large number of changes in their cars designed to improve mileage. The changes, such as direct fuel injection into the cylinders around the pistons, further complicated the tests, Cho said.

“This is just a procedural error,” he said. “It is not intended whatsoever.”

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 even with the revised window stickers.

The mileage was overstated on about one-third of the Hyundais and Kias sold during the three model years, he said.

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Car Buyers Unfazed by Storms, Financial and Tropical, in August

General Motors, the Ford Motor Company and Chrysler all posted impressive gains from a year earlier in their August data released on Thursday. Industrywide, sales rose 7.5 percent from a year ago and 1.2 percent from July, according to the Autodata Corporation, which tracks auto sales.

“Consumers are getting used to making these big-ticket item purchase decisions in an everlasting, chaotic, uncertain economic environment,” said Jesse Toprak, vice president for industry trends and insight at, an automotive research firm. “We’re seeing more and more consumers becoming relatively comfortable in pulling the trigger when they don’t have all the answers.”

Almost all of the 20 largest automakers have sales gains for the year to date. The only exceptions are Honda and Toyota, whose dealers have struggled to keep their lots stocked sufficiently since the earthquake and tsunami struck Japan early this year. Honda’s sales in the United States fell 24.3 percent last month from August 2010, and Toyota’s sales declined 12.7 percent.

Shortages of some small, fuel-efficient cars hindered other carmakers as well.

G.M. sales rose 18 percent, and Ford reported an 11.1 percent increase. But both companies are having trouble keeping up with demand for their respective compact cars, the Chevrolet Cruze and Ford Focus, among other models.

G.M. is adding overtime shifts to the Ohio plant that builds the Cruze, and Ford said it is stepping up overall production by 9 percent in the fourth quarter from what it was at the end of 2010. Sales of the Focus, which was redesigned for the 2012 model year, declined 8.9 percent in August despite increased demand for vehicles of its size.

The auto industry continues to make big strides in recovery from the depths of the financial crisis. Sales of autos are on track to be well ahead of last year, when 11.6 million vehicles were sold in the United States. G.M. said it remains confident that industry sales will top 13 million vehicles this year, even though several analysts have recently chopped their projections. At G.M.’s projected rate, sales would be roughly back to their 2008 level, when 13.2 million were sold in the United States.

“Consumers are being cautious, and appropriately so, but they are not retrenching,” said Don Johnson, G.M.’s vice president for United States sales operations, on a conference call. “All indications to us are that the industry is going to slowly grow for the rest of this year.”

But Adam Jonas, an analyst with Morgan Stanley, questioned whether G.M. is “playing chicken” with the economy by maintaining or increasing production even as consumer confidence levels slide. G.M. “could get caught out with large production cuts and/or price discounting should the underlying market not recover as G.M. appears to have anticipated,” Mr. Jonas wrote in a report Thursday afternoon.

Ford officials said the company is not stockpiling extra inventory in preparation for a possible strike by the United Automobile Workers union, a typical practice for the Detroit carmakers during past negotiations. U.A.W. members have been overwhelmingly voting this week in favor of authorizing a strike against Ford if contract talks break down.

Labor experts say a strike against Ford is unlikely, but union leaders have been urging workers to approve an authorization as a bargaining tool. At least 98 percent of workers have voted in favor of authorizing a strike at large U.A.W. locals in Chicago, Cleveland, Louisville and Kansas City, Mo. Voting is scheduled to finish Friday. Ford is the only Detroit carmaker whose workers can strike over wages and benefits. G.M. and Chrysler employees agreed to no-strike clauses as part of concessionary deals they approved before those companies’ bankruptcies in 2009.

Chrysler said its August sales rose 30.6 percent, including a 58 percent increase for its Jeep brand of sport utility vehicles. It was the 17th consecutive month of year-over-year increases for Chrysler, which is gathering momentum after being written off by many critics. The company outsold Toyota by 636 vehicles, the third time this year that Chrysler has topped its larger, but injured, Japanese rival.

Nissan, which was able to return to normal production levels much faster that Honda and Toyota, reported a 19.2 percent gain. Nissan ran ads last month juxtaposing the abundance of inventory at its dealerships with bare Honda showrooms.

Sales rose 9.1 percent at Hyundai and 26.9 percent at Kia.

Consumer confidence has slipped recently, and economic growth has been crimped by the persistent European debt crisis and the debate in Washington over how to cut spending by the federal government.

As August began, markets swooned with uncertainty over whether Congress would lift the debt ceiling and with the subsequent cut in the nation’s credit rating. The month ended with much of the East Coast focused more on Hurricane Irene than on buying a new car. In addition, some shoppers probably stayed on the sidelines in the hopes of getting a good deal during the coming holiday weekend, said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates.

“We did see things get a little bit weaker as we got into the second half of the month,” Mr. Schuster said. “Many buyers are still conditioned to the strong Labor Day sales, so we could have seen some buyers pull back their purchase decisions waiting for some deals.”

From January through July, industry sales rose 10.9 percent. Excluding the 7.1 percent decline at Toyota and 2.6 percent decline at Honda, the industry gain was 16.6 percent in the period.

Nissan pulled further ahead of G.M. last month in the battle between the Leaf electric car and the Chevrolet Volt plug-in hybrid. Leaf sales for the month were 1,362, more than quadruple the Volt’s 302. Since they were introduced late last year, the Leaf has outsold the Volt by two to one.

G.M. halted production of the Volt this summer to retool in preparation for an large increase in production and said it is still working to build enough inventory to meet demand. It has promised significantly higher Volt sales in the months ahead.

“Every unit that we ship right now is presold,” said Alan Batey, the head of Chevrolet sales in the United States. “It’s essentially a magnet for us. It’s doing a wonderful job for the brand.”

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