Kia and Hyundai Go to War in Santa Ana Court

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When Kia and Hyundai were forced to recalculate their gas-mileage claims after a government audit, the top two South Korean automakers may have believed regulatory fines and a consumer compensation plan would have ended the financial bleeding.

Think again, unless Kia and Hyundai can fight court challenges filed in Santa Ana federal court.

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Hyundai, whose new North American headquarters is rising along the 405 freeway in Fountain Valley, and Kia, whose corporate offices in Irvine opened in 2008, are being sued by consumers unhappy with exaggerated fuel-economy claims.

If those car owners are successful, analysts estimate it could cost Kia and Hyundai an additional $775 million. The first of two suits claims the value of Kias and Hyundais will decrease because of the controversy, while the 23 plaintiffs in the most-recent action target the compensation plan, claiming it "falls short of making this right for consumers."

In a statement from their attorney Rob Carey, the second class finds it unfair they must bring their cars in for odometer checks and reapply every year for monies due under the plan. While Kia officials say they are reviewing the lawsuit, Hyundai execs react that the plan is the best and fastest way to make sure customers are compensated.

Moody's Investors Service estimates (via Reuters) that burned customers will receive about $100 million in fuel under the plan, but that Kia and Hyundai are vulnerable to other costs. North America accounted for about 24 percent of Hyundai's global sales in the first nine months of 2012, according to Moody's.

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