South Korea’s carmakers Hyundai and affiliate Kia agreed to pay $350 million to the US government as punitive penalties because they exaggerated fuel economy ratings for their models.
The US officials claim this is the largest-ever settlement for the mileage claims and the deal also follows another $395 million charge taken by the carmakers in December. That settlement was needed to end claims from the owners of the vehicles involved in the erroneous ratings. The total cost for the companies has thus exceeded $700 million, causing another drop in the market value of the companies – already impacted by the negative investor feedback over the purchase of a prized plot in Seoul to build a new headquarters.
The settlement with the US Environmental Protection Agency, the US Department of Justice and the California Air Resources Board puts and end to a probe that started back in 2012 and focused on the fuel economy claims of the two Korean automakers.
The agreement – with the penalties awarded under the Clean Air Act – calls for the owners of the 1.2 million cars and SUVs involved to levy a $100 million penalty, use around $50 million to prevent further mishaps and give up emissions credits worth more than $200 million.