Hyundai/Kia false mpg may bring industry-wide EPA probe

• Automakers say 'procedural error' caused mpg mistakes
• Government calls it 'an ongoing investiagtion'
• Embarrassment for EPA for not catching problem sooner

The government, spooked by discovering discrepancies in mileage numbers on 84 variations of 2011 to 2013 Hyundai and Kia models, is expected to consider an industry-wide mileage audit."This is an ongoing investigation," the Environmental Protection Agency says, but won't elaborate.

Cars are tested mainly by the automakers, using EPA protocols, and they provide the data to the government for mileage estimate calculations. The EPA itself tests about 15% of new models as a check on the system. The EPA says that until now, its audits found two vehicles since 2000 that needed new mpg labels: "This is the first time where a large number of vehicles from the same manufacturer have deviated so significantly."

LIST:EPA names models with false mpg labels

"EPA will have no choice but to broaden the audits," says Jesse Toprak, veteran industry analyst at TrueCar.com. "I wouldn't be surprised if turns out that Hyundai/Kia are not the only manufacturers that may have inaccurate mpg stickers."

EPA's "credibility is being questioned" because the agency failed to uncover the errors promptly, he says.

A massive audit could tax the EPA's auto test lab at Ann Arbor, Mich., and delay publishing verified mileage ratings as the 2013 model year begins.

The two South Korean makers will put new window-sticker labels with lower mileage ratings on its vehicles, including those still unsold at dealerships.

They also have apologized to current and former owners and have set up a plan to reimburse them for the difference in fuel costs between the old and new ratings -- based on the miles they drive -- plus 15% for their trouble. "I sincerely apologize to all affected Hyundai and Kia customers, and I regret these errors occurred," said Dr. W. C. Yang, chief technology officer of Hyundai/Kia research and development.The plan covers some 900,000 vehicles, which the makers are only about 35% of vehicles total sold they sold during the EPA time frame. And ratings for their two best-selling vehicles, Hyundai Sonata mid-size sedan and mechanically similar Kia Optima, were validated as correct.

The new ratings for the models changed typically are lower by one or two mpg, but one version of the Kia Soul takes a six-mpg hit on its highway rating.

Hyundai and Kia motor companies are units of South Korean conglomerate Hyundai Group. They share many engines, transmssions and other hardware. Both are strong-selling brands. in the U.S. Thus, a problem with even one drivetrain is magnified dramatically.

Hyundai/Kia's Sung Hwan Cho, who heads the automaker's U.S. technical centers, says there are enough variations in test procedures to explain the discrepancies. It's "a very complex testing process," he says.

"We added a few more stops and processes, which is different from what the EPA recommended," Cho says. The EPA process is rigid, "but there are also some points where we need some interpretation."

"Nobody is trying to con anyone," says Andrew Smart, director of industry relations at the Society of Automotive Engineers. Inconsistencies can be due to "subtle differences in vehicle configuration. ... I think in this occasion, very clearly, they never tried to mislead people."
The EPA began auditing these models after it got owner complaints about getting lower than rated mileage on the 2012 Hyundai Elantra. When its test data didn't match Hyundai's, the agency probed deeper, looking at more models and at mechanically similar Kias.

The changes eliminated all of the brands' much-advertised 40-mpg-rated models."Whether an honest mistake or a deliberate corporate effort to fudge the numbers, the fact that the companies' ballyhooed 40 mpg cars are no longer members of that august club - and that Hyundai and Kia are repaying customers who relied on the faulty mileage claims when purchasing their cars - will be something that haunts the companies for a long time to come. In an industry where reputation is so important, this will undoubtedly give both carmakers ugly black eyes," says John O'Dell, senior Green Car editor for Edmunds.com.Toprak does not think the mileage black eye will have a lasting effect on Hyundai and Kia sales. The embarrassing mistake "may potentially have a negative impact on consumers who are currently in the market but undecided," he says. But "the fundamentals of what made Hyundai and Kia brands a success in the U.S. do not change. They still offer some of the best value propositions in the industry, along with attractive styling and low cost of ownership."Contributing: Kelsey Mays, Cars.com