Hyundai: Too Many Horses

September 10, 2002
Hyundai says it's been misleading consumers about the horsepower of its cars since 1992. Hyundai says the misstatements weren't intentional and blames "mistakes and disorganization" within the company and is offering an olive branch to some of its more seriously misled customers.

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Kia, meanwhile, says it also overstated the horsepower of its 2001 and 2002-model year Kia Optima mid-sized sedans, which use engines supplied by Hyundai, its parent company.

Hyundai Motor America Inc. President and CEO Finbarr O'Neill said that while most of the miscalculations fall inside accepted industry margins of error -- plus-or-minus 4 percent -- the company wanted to set the record straight.

"I am very regretful for these errors and for any concerns they raise among Hyundai customers," O'Neill said.

The miscalculations affected about 1.3 million cars, of which 400,000 were misstated by more than 4 percent. The company estimates that the average misstatement among all 1.3 million vehicles was 4.6 horsepower.

The largest discrepancies include the 2001 and 2002 Santa Fe sport-utility, whose 2.4-liter engine produces 138 horsepower, 11 fewer than the 149 Hyundai claimed. Some models of the Sonata and XG300 sedans and the Tiburon sports coupe were also revealed to have double-digit discrepancies.

O'Neill said that since the Hyundai is hardly a performance car and is prized mostly for its low price, he doubted many consumers would be upset by the discrepancy.

"As you may know, horsepower is not a major reason for buying Hyundai vehicles," O'Neill said.

Nevertheless, the company says it will provide benefits to customers whose models were misstated by more than 4 percent.

For model-year 1999 and earlier cars, the company will provide a free five-year roadside assistance plan. For 2000 and newer models, customers will get their choice of:

• an extra five years of roadside assistance;
• an extension of the five-year/60,000-mile limited warranty to six years/72,000 miles; or
• an extension in the 10 year/100,000-mile power train warranty to 12 years/120,000 miles.

Hyundai has relied on generous warranties to ease consumer concerns over its once-shoddy quality and sharply boost U.S. sales.

Hyundai says the misstatements resulted because the actual horsepower figures changed between the time the vehicles were first tested and the time they actually went on sale. In some cases, he said, emission controls reduced the horsepower levels but the changes were not properly communicated within the company.

The errors were discovered when the Canadian government questioned the horsepower on the Elantra. Hyundai advertised the car as having 140 horsepower but after the Canadian inquiry it said tests showed the figure was actually 135.

Other manufacturers have had similar problems. Ford had to recall and repair an entire year's production of its SVT Mustang Cobra when its 1999 models fell well short of the 320 horsepower Ford had advertised.

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