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Hyundai And Kia Penalized $350 Million For Overstated MPG Claims

Nearly two years after Hyundai and Kia announced they exaggerated fuel economy numbers for several of their most popular models, the two Korean automakers have paid a heavy penalty for the transgressions. The Department of Justice and Environmental Protection Agency announced a settlement Monday that will cost the two car companies approximately $350 million. The financial sum includes a $100 million fine, the largest ever levied under the Clean Air Act, and about $200 million in forfeited greenhouse-gas emissions credits. At a time when car buyers rank fuel economy as a top concern when they head to dealerships and the federal government has mandated increased efficiency, Attorney General Eric Holder said the settlement should serve as a warning to automakers not to fudge their numbers. "This will send a strong message that cheating is not profitable," he said. The settlement ends a federal lawsuit filed against the automakers in U.S. District Court, but it's important to note that it doesn't end a class-action lawsuit filed on behalf of consumers. A preliminary settlement in that case, based in Los Angeles, was approved last month, but final approval isn't expected until July 2015. Officials with the EPA said the $100 million figure roughly equals the economic benefits the two companies received from exaggerating the mileage claims on the window stickers of new cars. Fuel-efficient boasts helped Hyundai and Kia establish a strong foothold in the U.S. marketplace. Advertisements for the Hyundai Elantra stated the vehicle achieved 40 miles per gallon in highway driving, and helped the car win the prestigious North American Car Of The Year honors at the Detroit Auto Show for its 2012 model. In July 2011, the advocacy group Consumer Watchdog began receiving complaints from consumers that the Elantra and other Hyundai models fell short of their stated mileage claims in real-world driving. The group wrote to the EPA and Hyundai, asking both to investigate. Government officials said Kia had overstated the mileage on its popular Kia Soul crossover by 6 miles per gallon, and more than a dozen overall models were affected. On Monday, EPA administrator Gina McCarthy said the violations were "egregious." Based on the exaggerations, the EPA calculated that Hyundai and Kia had underreported the greenhouse gas emissions of their fleets by about 4.75 metric tons over the estimated lifetime of the vehicles. That figure aided in the $200 million credit forfeiture.

Center for Auto Safety wants Hyundai and Kia to recall 2.9M vehicles

DETROIT — A nonprofit auto safety group is demanding that Hyundai and Kia recall 2.9 million cars and SUVs in the U.S. due to consumer complaints that they can catch fire. The Center For Auto Safety said Friday that there have been more than 220 complaints to the U.S. government since 2010 about fires and another 200 complaints about melted wires as well as smoke and burning odors. The complaints involve the 2011 through 2014 Kia Sorento and Optima and the Hyundai Sonata and Santa Fe. Also included is the 2010 through 2015 Kia Soul. The fires are being investigated by the National Highway Traffic Safety Administration as part of a 2017 probe into Hyundai and Kia engine failures. "The volume of fires here make it appear that Hyundai and Kia are content to sit back and allow consumers and insurers to bear the brunt of poorly designed, manufactured and repaired vehicles," Jason Levine, the center's executive director, said. The fire reports have come in from across the country, including a death in Ohio in April 2017, he said. Hyundai says it monitors safety concerns and acts quickly to recall defective vehicles. "We have a robust system in place for monitoring and investigating reported vehicle fires that includes investigation and reporting to NHTSA as required. Vehicle fires can result from a variety of reasons," the company statement said. Kia said it is using company and third-party fire investigators to determine what caused the fires so it can address them. "A vehicle fire may be the result of any number of complex factors, such as a manufacturing issue, inadequate maintenance, the installation of aftermarket parts, an improper repair, arson, or some other non-vehicle source, and must be carefully evaluated by a qualified and trained investigator or technician," the company said in a statement. The Center for Auto Safety filed a petition asking NHTSA to investigate the fires in June. The agency said Friday that it is still evaluating the petition and it has sent information requests to Hyundai, Kia and other automakers about the issue. Levine says the center does not know what's causing the fires. In May 2017 the government began investigating whether the automakers moved quickly enough to recall over 1.6 million vehicles because of engines stalling. NHTSA is looking into three recalls by the related Korean brands, and it's also investigating whether the automakers followed safety reporting requirements.

IIHS: Drivers safer than passengers in frontal crash test

The Insurance Institute for Highway Safety introduced a small overlap frontal crash test in 2012 that replicates what happens when the front corner of a car impacts another object. In the test, vehicles travel at a speed of 40 mph toward a five-foot-tall barrier with 25 percent of the total width of the car striking the barrier on the driver side. One would assume that vehicles with good small overlap front ratings would protect the driver and the passenger equally. But a recent study from the IIHS proves that passengers aren't as protected as drivers. The IIHS conducted the test on seven small SUVs with good driver-side small overlap ratings and only one of the vehicles, the 2016 Hyundai Tucson, performed well enough to be given a good rating. The other SUVs performance ranged from poor to acceptable. After reviewing the results of the test, the IIHS is deliberating whether it should institute a passenger-side rating as part of its Top Safety Pick criteria. "This is an important aspect of occupant protection that needs more attention," states Becky Mueller, lead author of the study and an IIHS senior research engineer. "More than 1,600 right-front passengers died in frontal crashes in 2014." Since the small overlap front test was introduced, 13 automakers have made structural changes to 97 vehicles with roughly three-quarters earning a good rating after the adjustments. The IIHS' test for frontal ratings is completed with a dummy in the driver's seat and with a barrier overlapping the driver's side. Which makes sense, as passengers aren't always riding in a vehicle. "It's not surprising that automakers would focus their initial efforts to improve small overlap protection on the side of the vehicle that we conduct the tests on," states David Zuby, IIHS executive vice president and chief research officer. "In fact, we encouraged them to do that in the short term if it mean they could quickly make driver-side improvements to more vehicles. As time goes by, though, we would hope they ensure similar levels of protection on both sides." As the IIHS' test revealed, there's a massive difference in safety between the two front seats. Increase passenger safety, according to Mueller, would require automakers to strengthen the occupant compartment by using a different type of material or by making it thicker.