November 30, 2012 / 6:09 PM / 8 years ago

Senator presses Hyundai, Kia on compensation plans

WASHINGTON (Reuters) - A senior senator is pressing Hyundai Motor Co and its affiliate Kia Motors Corp on their plans to compensate customers for inflated fuel-efficiency claims the two companies admitted earlier this month.

The logo of Hyundai Motor is seen on the wheel of a car at a Hyundai dealership in Seoul April 26, 2012. REUTERS/Kim Hong-Ji

Hyundai and Kia have agreed in negotiations with the Environmental Protection Agency to reimburse customers for additional fuel costs.

Under the plan, customers who purchased one of 13 Kia or Hyundai models from the 2011 to 2013 model years will receive a debit card to reimburse them for the difference in fuel economy and an extra 15 percent will be added to the account to acknowledge the inconvenience.

“While I believe this is a positive step, I am concerned that many affected customers may not learn about the program or may find it burdensome to participate,” Senate Commerce Committee Chairman Jay Rockefeller said in separate letters to the heads of Hyundai and Kia’s U.S. divisions on Thursday. The letters were posted on the Commerce Committee’s website.

He pressed the executives to explain by December 14 how their companies will “maximize the effectiveness and the accessibility” of the program and their plans to reach customers who might not initially take advantage of it.

Four weeks ago, Hyundai and Kia conceded that they overstated the fuel economy by at least a mile per gallon on more than 1 million recently sold vehicles.

Moody’s Investors Service has estimated the compensation campaign could cost Hyundai $100 million a year until the cars are scrapped. The automaker also faces lawsuits over the matter.

On Wednesday, at the Los Angeles auto show, John Krafcik, head of Hyundai Motor America, said the automaker has sent letters to the owners of every affected vehicle and spoken to thousands by phone, email or in person at dealerships.

He said Hyundai has sent thousands of debit cards to owners that will allow them to buy enough gasoline to make up the difference between what the mileage claims were and what they should have been.

Krafcik said Hyundai estimates 90 percent of affected owners who have come to dealerships for odometer verification are satisfied with the reimbursement program.

A Hyundai spokesman declined to comment further on Friday, while a spokesman for Kia also declined to comment.

Reporting By Doug Palmer in Washington and Ben Klayman in Detroit; Editing by Bill Trott and Carol Bishopric

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