Washington - In what officials are calling the biggest settlement of its kind, Hyundai and Kia have been slapped with $350 million (R3.85 billion) in penalties, to be paid to the US government, for overstating fuel economy ratings.
The deal comes on top of $395 million (R4.3 million) that the carmakers agreed to pay last December to resolve claims from the owners of the vehicles, bringing the companies' total cost for the mileage overstatements to more than $700 million.
Monday's settlement with the US Environmental Protection Agency, the US Department of Justice and the California Air Resources Board resolves an investigation of the South Korean carmakers' 2012 fuel economy ratings. The penalties were the largest ever under the Clean Air Act.
“This will send an important message to automakers around the world that they must comply with the law,” said Attorney General Eric Holder.
Under the accord, which involved the sale of 1.2 million cars and SUVs, the South Korean car firms will pay a $100 million penalty, spend around $50 million to prevent future violations and forfeit emissions credits estimated to be worth more than $200 million.