Hyundai & Kia to Pay a Record $210 Million Penalty in Delaying Recalls

Hyundai and Kia on Friday agreed to a record $210 million civil penalty after US auto safety regulators said they failed to timely recall 1.6 million vehicles for engine related issues.

According to the US National Highway Traffic Safety Administration (NHTSA), the two affiliated Korean automakers agreed to consent orders after it said they had inaccurately reported some information to the agency regarding the recalls.

Hyundai agreed to a total civil penalty of $140 million, including 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. Kia’s civil penalty totals $70 million, including an upfront payment of $27 million, requirements to spend $16 million on specified safety measures and a potential $27 million deferred penalty.

This is the result of an inquiry by NHTSA into its recalls of the 2011–2014 Sonata and 2013–2014 Santa Fe Sport SUV, as well as Kia vehicles from 2011–2014 model years. According to NHTSA Deputy Administrator James Owens:

“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.”

As part of the settlement, Hyundai is investing $40 million to build a safety field test and inspection laboratory in the United States and implementing new IT systems to better analyze safety data. Brian Latouf, chief safety officer, Hyundai Motor North America said “We are taking immediate action to enhance our response to potential safety concerns.”

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

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