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U.S. appeals court preserves $210M Hyundai-Kia fuel economy class settlement

A U.S. appeals court restored a $210 million nationwide class-action settlement for hundreds of thousands of owners of Hyundai Motor Co and Kia Motors Corp vehicles whose fuel economy estimates were inflated. By an 8-3 vote on Thursday, in a case closely watched by class-action lawyers, the 9th U.S. Circuit Court of Appeals in Pasadena, California, said vehicle owners had enough in common to let them settle as a group. It also rejected arguments by owners opposed to the settlement that the claims process was too burdensome, and that lawyers for the class had colluded with the automakers to extract a "sweetheart deal" that undervalued their claims. The case began after the U.S. Environmental Protection Agency found flaws in Hyundai's and Kia's testing procedures, prompting the automakers to lower fuel efficiency estimates for about 900,000 vehicles from the 2011, 2012 and 2013 model years. Lawyers for objecting drivers had no immediate comment. Hyundai said it was grateful for the decision. Kia and its lawyers did not immediately respond to requests for comment. The decision by Circuit Judge Jacqueline Nguyen upheld a settlement approved in June 2015 by U.S. District Judge George Wu in Los Angeles. Wu "made careful findings, which the objectors here largely do not challenge, and which more than support the judgment," Nguyen wrote. The decision reversed a divided three-judge 9th Circuit panel's January 2018 rejection of the settlement and decertification of the class action. That panel said Wu failed to assess whether differences in state laws prevented certification of a nationwide class. It also said used car owners should have been excluded because it was unclear whether they had relied on the South Korean automakers' fuel economy claims. Lawyers had said it would become much harder to obtain nationwide settlements if the panel ruling stood. Nguyen had dissented from the panel ruling. Circuit Judge Sandra Ikuta, who wrote it, dissented on Thursday. Ikuta accused the majority of failing to determine what law should apply to the nationwide class or how the settlement, and thus attorneys' fees, should be valued. "The majority's failure to correct these errors may be beneficial for the class action bar, but it detracts from compliance with Supreme Court precedent," Ikuta wrote. The 9th Circuit covers nine western U.S. states, Guam and the Northern Mariana Islands.

Hyundai plans to catch up with other automakers, offer EVs

YONGIN, South Korea (Reuters) - South Korea's Hyundai Motor Co is developing its first dedicated architecture for electric vehicles, seeking to catch up with the likes of Tesla in the growing segment with multiple, long-range models. While the platform will not be completed soon, Hyundai Motor and affiliate Kia plan to roll out small electric sport utility vehicles (SUVs) based on an existing underpinning next year, said Lee Ki-sang, who leads Hyundai-Kia's green cars operations. Hyundai will launch an electric SUV, followed by a sibling model by Kia Motors next year, Lee said, citing strong demand for SUVs. The subcompact or compact models would have a range of more than 300 km (186 miles) per charge, and would be "more competitive" than rival offerings, Lee said. And Hyundai said in a statement on Thursday that it plans to launch a new luxury electric vehicle under its Genesis marque in 2021, after introducing a plug-in hybrid version of an unidentified Genesis model in 2019. The separate platform represents a major push into the battery electric-car segment for a firm which has long trumpeted rival fuel-cell vehicles, reflecting strong investor pressure to compete more vigorously in a market that has been stimulated by U.S.-based Tesla's longer-range models. And tough fuel-economy and emissions regulations in the United States, Europe and China are compelling automakers to push fuel-efficient cars even though low oil prices have undercut demand. Hyundai's electric-car platform would allow the automaker to install a battery pack in vehicle floors to accommodate more battery capacity and maximize cabin space, Lee said. "The electric-vehicle platform will require high up-front investments, but we are doing this to prepare for the future," he said at Hyundai-Kia's green car research center in the city of Yongin, outside Seoul. He did not reveal the cost. Lee, a senior vice-president at Hyundai Motor, was speaking during an interview on the eve of an auto show that kicked off in Seoul on Thursday. Analysts said Hyundai had no choice but to build separate electric-vehicle platforms to be relevant in the segment. "The separate platform may incur losses initially, but Hyundai will be left behind the market if they don't offer long-distance models, like 300 km, 500 km and 600 km," said Ko Tae-bong, an analyst at Hi Investment & Securities.

Sales incentive growth clustered around brands with few CUVs, trucks

While it's arguably been around the longest, the dominance of the four-door sedan has been under threat for many years. As a further sign of the hurtin' that SUVs and crossovers have put on today's four-doors, a new report from Automotive News points to the increasing use of incentives by brands reliant on cars and light on CUVs and pickups.
Honda, Toyota, Volkswagen and Kia have all been stung by double-digit increases in their incentives-to-transaction price ratio, according to AN, which cites data from TrueCar. Honda's ratio is up 14 percent, while Toyota, VW and Kia are up 18, 15 and 19 percent, respectively.
"Most of the incentive growth we have seen is in product segments with low demand - midsized or large sedans," TrueCar CEO John Krafcik told AN. "As this trend goes on, the brands with three-sedan strategies are going to be in worse shape on incentive spending than the crossover brands."