Hyundai Agrees to Settle U.S. Lawsuits Over Fuel Efficiency

Hyundai Motor Co. (005380) agreed to settle a group of lawsuits by U.S. customers who said they were misled into buying the South Korean carmakers’ vehicles because it overstated their fuel economy.

Lawyers for the plaintiffs said in a filing today in federal court in Los Angeles that Hyundai agreed in principle on terms of a settlement. The actual amount Hyundai would pay wasn’t disclosed. Kia Motors Corp. (000270), which was also sued for misstating its cars’ miles-per-gallon, is evaluating whether to join the settlement, according to the filing.

Hyundai and Kia, South Korea’s largest and second-largest automakers respectively, said in November they would issue debit cards to buyers of about 900,000 vehicles sold in the U.S. in the past two years to reimburse them for higher-than-expected fuel expenses.

“Procedural errors” at a joint testing facility in South Korea led to the inaccurate fuel-economy ratings, the Seoul- based affiliates said last year.

Hyundai and Kia, which share engines, model platforms and a chairman, said in a Nov. 2 statement that its fuel economy level for the 2012 fleet would be reduced by an average of 3 percent.

Payment Option

The class-action settlement would give buyers the option of a lump-sum payment, according to the filing.

Thirty-eight lawsuits were filed in federal court in the U.S. against Hyundai and Kia over the fuel-efficiency correction. In February, the cases were consolidated in Los Angeles.

Robert Carey, a lawyer with Hagens Berman Sobol Shapiro LLP, the firm that has led the negotiations with Hyundai, declined to comment on the settlement. Scott McKee, a spokesman for Kia Motors America had no immediate comment, and Chris Hosford, a spokesman for Hyundai Motor America, didn’t immediately return a call to his office.

The case is Hyundai and Kia Fuel Economy Litigation, 13-ML- 02424, U.S. District Court, Central District of California (Los Angeles.)

To contact the reporter on this story: Edvard Pettersson in the Los Angeles federal courthouse at epettersson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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