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Tuesday, July 23, 2024

Hyundai sued by dealers for faking EV sales data and rewarding those who comply to scheme

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Hyundai has been sued again, this time for allegedly manipulating electric vehicle sales.

According to the U.S. District Court for the Northern District of Illinois Eastern Division, Napleton Aurora Imports and a group of Hyundai dealers in Illinois filed a lawsuit against Hyundai Motor America. The dealers alleged that Hyundai Motor America violated seven laws, including common law fraud, breach of agreement, and the Illinois Motor Vehicle Franchise Act. The complaint was filed with the court on July 5, and the plaintiffs demanded a jury trial.

In the complaint, the plaintiffs allege that Hyundai “inflated its publicly reported sales” by coding sales vehicle codes to loaner vehicles and that it rewarded dealers who agreed to falsely report unsold vehicles as sold. “Dealers who elect not to participate in the unlawful scheme were penalized,” the plaintiffs added.

A group of Hyundai dealers in Illinois sued Hyundai Motor America for allegedly rewarding dealers who comply with the unlawful scheme reporting unsold vehicles as sold. [Courtesy of Hyundai Motor America]

For example, “the compliant dealers were rewarded with unlawful price discounts, preferred allocation of hot-selling models, discount coupons to give to consumers and other benefits,” according to the complaint. The complaint alleges that Hyundai Motor America should reimburse the dealers for their losses. The plaintiffs liken Hyundai Motor America’s behavior to a “multitiered scheme.”

“The desirable inventory is concentrated in the hands of compliant dealers of the scheme, so consumers were left with less choice and benefit from less competition,” the plaintiffs allege in their complaint, adding “Hyundai Motor America has emphasized sales-volume growth in its Hyundai branded EVs, leading the public to believe these increasing EV sales are occurring organically because of the desirability of Hyundai EVs and customer demand for these vehicles.”

The complaint also describes a phone call with Hyundai Motor America’s District Sales Manager. The complaint alleges that the manager said, “We gotta hit a number for the press and for the Koreans.”

Hyundai Motor America strongly denied the allegations and said in a statement on July 8 that it does not condone falsifying sales data.

Hyundai has been accused of numerous allegations recently from April 2018 to January 2023, including defective vehicles, service center issues, illegal hiring, and vehicle thefts, with a total of 20 class action lawsuits filed over the past four years and nine months.

BY YEOL JANG, HOONSIK WOO [jang.yeol@koreadaily.com]