Hyundai Motor and Kia Motors US units reportedly agreed to a record US$210m civil penalty after auto safety regulators said they failed to recall 1.6m vehicles for engine issues quickly enough.
According to Reuters, the National Highway Traffic Safety Administration (NHTSA) said the two affiliated Korean automakers agreed to consent orders after they had inaccurately reported some information to the agency regarding the recalls.
Go deeper with GlobalData
The report said Hyundai agreed to a total civil penalty of $140m, including an upfront payment of $54m, an obligation to spend $40m on safety performance measures, and an additional $46m deferred penalty if it does not meet requirements.
Kia's civil penalty is $70m, including $27m upfront, requirements to spend $16m on specified safety measures and a potential $27m deferred penalty.
"It's critical manufacturers appropriately recognise the urgency of their safety recall responsibilities and provide timely and candid information to the agency about all safety issues," NHTSA deputy administrator James Owens told Reuters.
See Also:
The settlement covers recalls in 2015 and 2017 for manufacturing issues that could lead to bearing wear and engine failure.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAs part of the settlement, Hyundai is investing $40m to build a safety field test and inspection laboratory in the United States and implementing new IT systems to better analyse safety data, Reuters said.
"We are taking immediate action to enhance our response to potential safety concerns," said Brian Latouf, chief safety officer, Hyundai Motor North America, told Reuters.
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".
