Cash and an apology go a long way to defusing a major row We havent heard much about it in Europe, but Hyundai and Kia have had a brush with
PR disaster in the US this month. However, they appear to have managed to contain much of the fallout through the power of swift apology and generous compensation.
It started when the US Environmental Protection Agency said the car makers had overstated the fuel economy of many of their vehicles by 1-2mpg, rising to a 6mpg over-statement on the Kia Soul. Buyers and commentators predictably went stratospheric, demanding answers to the lies, for heads to roll and, of course, compensation for everything from the extra fuel costs to damaged resale values of the cars.
In total, around one in three cars sold by the firms in the past three years was affected – 900,000 in total. Hyundai and Kia blamed procedural errors at joint testing operations in Korea for the problem.
Crucially, though, they reacted swiftly to the accusations. An apology was issued immediately. A compensation programme was devised, with owners issued with gift cards carrying a payment based on how many miles they have driven, the fuel price where they live and a 15 per cent bonus to say sorry. These cards will be topped up for as long as the owner has the vehicle.
The row rumbles on, and there are lawsuits outstanding, but crucially owners seem to have been appeased less than a month after the story broke. John Karfcek, Hyundai USAs boss, says feedback suggests 90 per cent of owners are happy with the firms reaction, but he emphasises that hes working on appeasing the other 10 per cent. Sales predictions for Hyundai remain on course; on some cars, demand is outstripping supply.
All of which goes to show that the best response for a major company in a crisis is to say sorry as fast as possible and dig as far as you can into your deepest pockets. It's a remarkably simple solution that very few major corporations appear to grasp.
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