Korean automakers, Hyundai and Kia to pay $210 million U.S. auto safety civil penalty

Share to friends

The U.S units of the two Korean automakers, Hyundai Motor Co and Kia Motors, have accepted to pay a record $210 million in combined civil penalties after U.S. auto safety regulators said they failed to quickly recall 1.6 million vehicles with engine issues in 2015 and 2017.

“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 James Owens, the Deputy Administrator of the U.S. National Highway Traffic Safety Administration (NHTSA).

Hyundai was fined $140 million, which includes an upfront payment of $54 million, an obligation to spend $40 million on safety performance measures, and an additional $46 million deferred penalty if it does not meet requirements, according to Reuters.

READ ALSO  Stock market crash: Professor warns of 66% plunge, negative returns in stock market

Kia was fined $70 million, which includes an upfront payment of $27 million, requirements to spend $16 million on specified safety measures and a potential $27 million deferred penalty.

Hyundai will invest $40 million to build a safety field test and inspection laboratory as part of the fine. It will also implement new IT systems to better analyze safety data.

“We are taking immediate action to enhance our response to potential safety concerns,” said Brian Latouf, chief safety officer, Hyundai Motor North America.

Kia said in statement it “denied the allegations but agreed to settle the matter to avoid a protracted dispute with the government”. It added it has agreed “to restructure and transfer the departments responsible for recall determinations to the United States”.

In August 2014, Hyundai was also fined $17.35 million for failure to recall 43,500 Genesis cars manufactured in 2013 to fix brake issues linked to two injuries. It agreed to pay the fine at that time.

READ ALSO  Ferrari CEO Louis Camilleri abruptly resigns for 'personal reasons'

To date, most of the affected Genesis vehicles have been repaired through the recall process, according to reports.

“Hyundai remains committed to making safety our top priority, and is dedicated to ensuring immediate action in response to potential safety concerns including the prompt reporting of safety defects,” David Zuchowski, the president and CEO of Hyundai Motor America, said in 2014.

TESLA CEO, Elon Musk overtakes Bill Gates to become the world’s second-richest man after his net worth rose by $100B in a year