Hyundai Motor's US Sales Corporation Sued for Allegedly Inflating Electric Vehicle Sales Figures

Napleton and Others Sue Hyundai Dealer Group
Accused of Manipulating Performance Using 'Rental Vehicle' Inventory Codes
Hyundai Motor: "We Do Not Tolerate Inflation, Investigation Underway"

Hyundai Motor America (HMA) has been sued on allegations of inflating electric vehicle sales figures, according to major foreign media reports on the 8th (local time).

According to the reports, Napleton Aurora Imports, a Hyundai dealer group based in Illinois, along with related affiliates, filed a lawsuit on the 5th at the U.S. District Court in Chicago, accusing HMA of manipulating electric vehicle sales figures and discriminating against dealers who did not participate.

[Image source=Reuters Yonhap News]

Napleton claims that HMA pressured dealers to inflate sales by abusing the inventory codes for 'loaner vehicles,' and dealers who complied received wholesale and retail price discounts and other incentives from HMA.

Hyundai Motor issued a statement on the same day, saying the company does not tolerate sales manipulation and has launched an investigation after becoming aware of the lawsuit. Hyundai Motor also added that it is currently pursuing legal action to terminate contracts with two Napleton-affiliated dealerships in South Florida related to sexual assault allegations. This is interpreted as a possibility that the dealer filing the lawsuit is retaliating due to dissatisfaction with contract termination.

The plaintiff's issue concerns HMA's violation of the Robinson-Patman Act. Dealers involved in inflating HMA's numbers allegedly received more popular models, depriving customers of choice. Enacted in the U.S. in 1936, the Robinson-Patman Act aims to prevent price discrimination and promote fair competition in the market by restricting suppliers or wholesalers from offering discounted prices to certain 'preferred customers.'

The plaintiffs stated, "Instead of selling vehicles based on normal consumer demand, HMA planned for dealers to present false sales figures," and cited a phone call with a Hyundai sales manager in the complaint. In the call, the sales manager reportedly said, "We have to match the numbers for the media and Koreans."

The plaintiffs are demanding the court to award damages calculated based on lost sales and profits, claiming they suffered disadvantages from HMA. Previously, Napleton sued U.S. automaker Chrysler in 2016 over similar allegations of inflating sales figures. They reached a settlement with Chrysler in 2019. At that time, Chrysler denied the allegations and kept the settlement terms confidential, but it is known that they paid $40 million (approximately 60 billion KRW) in settlement to the U.S. Securities and Exchange Commission (SEC).

Meanwhile, Hyundai Motor's India subsidiary is preparing for a stock market listing in India between September and October. It is expected to raise up to $3.5 billion (approximately 4.85 trillion KRW) through this initial public offering (IPO).

This content was produced with the assistance of AI translation services.