Hyundai Motor Dealers File Lawsuit Over Alleged Sales Inflation

A group of Hyundai Motor dealers has filed a lawsuit against the South Korean automaker in a Chicago federal court. The lawsuit accuses Hyundai Motor America Corp (HMA) of inflating sales numbers for electric vehicles (EVs) and penalizing franchises that refused to participate in the scheme.

The lawsuit, initiated by Napleton Aurora Imports in Illinois and affiliated franchises, claims that HMA pressured dealers to misuse inventory codes designated for “loaner” vehicles to artificially boost their sales figures.

Incentives and Penalties:

According to the lawsuit, dealers who complied with the improper coding were rewarded by Hyundai with wholesale and retail price discounts and other incentives.

Conversely, those who did not participate were allegedly punished. Hyundai has responded by stating it does not condone falsifying sales data and has launched an investigation into the allegations.

Legal Background and Further Accusations:

The lawsuit accuses Hyundai of fraud and violations of the Robinson-Patman Act, a federal antitrust law prohibiting price discrimination.

It claims that dealers who cooperated with the scheme were granted additional inventory of high-demand Hyundai models, thereby limiting customer choice and falsely boosting Hyundai’s public and investor-facing sales figures.

The complaint includes allegations of a Hyundai district sales manager stating, “We gotta hit a number for the press and the Koreans,” emphasizing the pressure placed on dealers to report inflated sales.

Previous Legal Issues and Broader Implications:

In addition to the lawsuit, Hyundai mentioned its ongoing litigation in South Florida to terminate two Napleton-affiliated franchises connected to a criminal sexual battery allegation. The Napleton plaintiffs’ attorney has declined to comment on these matters.

Due to Hyundai’s alleged practices, the plaintiffs seek unknown damages to cover lost sales, revenue, and profit. This lawsuit follows a similar case in which Napleton settled with Chrysler in 2019 after accusing the automaker of inflating sales figures.

Although Chrysler denied the claims, they agreed to a $40 million settlement with the U.S. Securities and Exchange Commission in a related action.

Impact on Hyundai’s Reputation and EV Market:

The lawsuit asserts that Hyundai’s emphasis on sales-volume growth for EVs has misled the public into believing that the demand was market-driven.

At the same time, false sales reporting allegedly fueled it. This case highlights significant concerns about corporate practices and transparency within the automotive industry, particularly as companies navigate the evolving EV market.