A three mpg misrepresentation on the fuel economy of the 3-door Hyundai Veloster is a significant “error.”
Hyundai has just canceled a media event in Michigan after the revelation last Friday that 600,000 of its 2011-2013 models had fraudulent EPA stickers that overstated mileage ratings on average by as much as 3 mpg. (EPA Catches Hyundai and Kia in Mileage Rating Fraud)
In an e-mail to journalists late this afternoon, Hyundai said, “We were looking forward to seeing you for the embargoed sneak preview of the new models to debut at the upcoming Los Angeles and Detroit Auto shows. Unfortunately, we need to cancel this event.”
Aside from being a time-worn P.R. technique to shut down a negative news cycle, which may or may not work in the bold new world of cyber media, the move likely reflects the huge demands on time of the P.R. staff and senior executives that a corporate crisis of this magnitude entails. For the moment, Hyundai auto show press conferences in the upcoming Los Angeles and Detroit shows remain scheduled and will no doubt be dominated by questions about the EPA fraud problem and its effects on the South Korean brand
Hyundai of course heavily advertises and promotes fuel economy as the very cornerstone of the brand. Moreover, Hyundai has knocked and mocked other automakers for having an asterisk in their advertising since only some their models achieve the best mileage in the ad. Hyundai, in effect, should have been running ads with the world’s largest mileage asterisk:
*These Numbers Are False.
“Our approach has always been to put all of this technology in all of our vehicles at an affordable price and that still remains, we believe, a differentiating strategy between Hyundai and other brands,” said John Krafcik, CEO of Hyundai Motor America during a Hyundai press call last Friday.
Hyundai was already embroiled in lawsuits over its mileage claims. “You know all we can do is let the lawsuits proceed. You know the situation has changed a little bit, but you know we’re just going to take those lawsuits as they come,” said Krafcik.
The so-called “Monroney” or window sticker is a label required to be displayed in all new automobiles sold in the U.S., and includes the listing of information about the car. Since the mid-1970s, EPA has provided fuel economy numbers on the label to help consumers choose more fuel efficient vehicles. A more comprehensive fuel economy and environment label, beginning in model year 2013, includes information and estimates on alternative fuel-powered vehicles.
EPA’s audit testing occasionally uncovers individual vehicles whose label values are incorrect and requires the manufacturer re-label the vehicle. This has happened only twice since 2000. EPA said this is the first time where a large number of vehicles from the same manufacturer have deviated so significantly.
Hyundai claimed that false mpg ratings resulted from “procedural errors” during a process called “coast down” testing in Korea. Coast down testing simulates aerodynamic drag, tire rolling resistance and drivetrain frictional losses and provides the technical data used to program the test dynamometers that generate EPA fuel economy ratings. The computer running the dynamometer test was using bad data that made the cars look much more efficient than they in fact were.
Hyundai (and twin Korean brand Kia) will reimburse current and former vehicle owners for the difference in fuel costs associated with the EPA rating change to fewer MPGs.
