Hyundai and Kia’s brand values have been harmed by the overstating of the mileage of some of their cars, according to market researcher Interbrand Corporation.
Masamichi Nakamura, executive director of Interbrand Japan in Tokyo, told Bloomberg that the mileage exaggeration issue will have an impact on the two brands’ values. “This is going to damage their brand value, though it’s difficult to give a number. Brand value is not only based on financial analysts’ forecasts, it is also formed by the public image and reputation,” Nakamura said.
Hyundai ranks 53th among the top 100 global brands this year with a $7.5 billion brand value, while sister brand Kia, worth $4.1 billion, is 87th, according to Interbrand. The U.S. Environmental Protection Agency (EPA) has found that the two automakers overstated the mileage on about a third of their vehicles sold in the U.S.
According to Nakamura, the mileage overstating incident may affect more the stock price, which is more sensitive than brand value. Hyundai’s share value fell 7.2 percent, the most since August 2011, and closed at 199,500 won on the Korea exchange. Kia also lost 6.9 percent to 56,300 won, the lowest since February 2011.
The two South Korean companies must pay owners combined compensation of 395.1 billion won ($362 million).