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Hyundai, Kia to pay $210 million for failing to recall vehicles

On Behalf of | Dec 3, 2020 | Uncategorized |

When regulators find safety defects in vehicles, those vehicles can be subject to recall. When this happens, it is crucial for the recall to be performed in a timely fashion to prevent any further crashes or injuries.

Recently, the U.S. units of Hyundai Motor Co and Kia Motors, two affiliated auto makers from South Korea, agreed to pay a record fine for delaying a safety recall affecting their vehicles. The National Highway Traffic Safety Administration (NHTSA) accused the auto makers of inaccurately reporting recall information to the agency.

A total of 1.6 million vehicles had potentially dangerous engine issues and needed to be recalled. NHTSA says that Hyundai and Kia failed to implement those recalls in a timely fashion. Now, the two companies have agreed to consent orders.

The settlement involves two recalls. They occurred in 2015 and 2017 and involved a manufacturing defect that led to worn bearings and, ultimately, potential engine failures.

“It’s critical that manufacturers appropriately recognize the urgency of their safety recall responsibilities and provide timely and candid information to the agency about all safety issues,” said a spokesperson for NHTSA.

Hyundai will pay a $140-million civil penalty. This will include an up-front payment of $54 million, $40 million to be spent on safety performance measures, and a contingent $45-million penalty if it fails to meet certain requirements.

The $40 million will pay for a U.S. safety field test and inspection lab and new IT systems intended to do a better job of analyzing safety data.

A spokesperson for Hyundai noted that “we are taking immediate action to enhance our response to potential safety concerns.”

Kia is facing $70 million in penalties, including an up-front payment of $27 million, $16 million in spending on safety measures and a contingent penalty of $27 million.

Kia will be creating a new, U.S.-based safety office which will be headed by a chief safety officer. Both auto makers are also required to retain independent, third-party auditors who will report directly to NHTSA and will also comprehensively review the auto makers’ safety practices.

Kia continues to deny the allegations but said it had agreed to settle in order to avoid a protracted dispute.

Not the first time Hyundai has been accused of delaying a recall

According to Reuters, Hyundai was accused in the past of delaying its recall of 43,500 Genesis cars affected by a brake defect and linked to two injuries. In 2014, it agreed to pay a fine of $17.35 million. At the time, NHTSA said Hyundai “must change the way they deal with safety-related defects.”

If you are notified that your vehicle is subject to a safety recall, do not procrastinate. The repair or replacement is free.

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