Hyundai Motor Co. (005380) and Kia Motors Corp. (000270) fell in Seoul trading as the automakers face consumer lawsuits in the U.S. after saying they overstated the fuel efficiency of their latest models.
Kia, South Korea’s second-largest automaker, lost 5.2 percent to 54,500 won as of 10 a.m. on the Korea Exchange, headed for its lowest closing level since January 2011. Hyundai, the nation’s largest carmaker, declined 3.3 percent to 206,000 won. The benchmark Kospi index dropped 1.7 percent.
A Hyundai owner and a Kia owner filed a complaint Nov. 2 in federal court in Santa Ana, California, seeking to represent other owners of certain 2011 through 2013 models in a class action, or group lawsuit, over the inaccurate efficiency figures. Hagens Berman Sobol Shapiro LLP filed a second suit in Los Angeles on behalf of owners, estimating their economic damage at $775 million, the Seattle-based law firm representing the plaintiffs said in a statement Nov. 7.
Hyundai and Kia will 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, the two Seoul-based companies, which share engines, model platforms and a chairman, said in a statement Nov. 2. They will also reduce fuel-economy levels for their 2012 fleet by an average of 3 percent after discussions with the U.S. Environment Protection Agency, the carmakers said.
“Procedural errors” at a joint testing facility in South Korea led to the inaccurate fuel-economy ratings, they said.
The case is Hunter v. Hyundai Motor America, 12-01909, U.S. District Court, Central District of California (Santa Ana.)
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