Hyundai sued in South Korea for fuel economy exaggeration image

Buyers in South Korea’s Hyundai Motor home market moved to call a trial against the nation’s biggest automaker as the company was caught by the South Korean transport ministry overstating a model’s fuel efficiency.

According to Kim Woong, managing partner at Yeyul, the law firm that represents the owners, 1,500 buyers of the diesel equipped Santa Fe SUV made between May 2012 and June 2014 have moved to file a suit in the Seoul Central District Court.

The lawsuit is the third of the kind for the particular mileage claim, and could prove a big challenge to the automaker’s reputation in its home market – already troubled by the rising won currency and by the strong gains of foreign brands.

“It’s definitely bad news for the company,” said Lee Sang Hyun, an analyst at NH Investment & Securities. “Although the compensation cost is expected to be relatively small, as it only involves the Santa Fe, we can’t completely rule out the possibility that the government may decide to test and find more vehicles that fail to meet the government’s standards.”

South Korea’s transport ministry last month announced that tests on the Santa Fe sport utility vehicle saw the automaker’s claims exceed the 5% allowed error limit mandated by law. The Korea Automobile Testing & Research Institute found out that the diesel running SUV had been claimed by the carmaker to run for 14.4 kilometers per liter, while the test reported the mileage was off by 6.3% in combined traffic and by 8.5% in city driving.

Via Bloomberg