Hyundai and Kia’s $210 Million Recall Failure
Hyundai and Kia are well-known for making some high-quality cars, but like many other automakers, they’ve made mistakes in the past. That being said, Hyundai and Kia have gotten themselves in hot water by making mistakes in their handling of an earlier recall. Here’s a look at how and why Hyundai and Kia were fined $210 million.
The recalled Hyundai and Kia cars
According to Reuters, this fine came on the heels of the 2015 and 2017 recalls of various Hyundai and Kia cars. Hyundai started the recall in 2015, while Kia did not start recalling its cars until 2017. This recall also affected many model years of several cars, and they include the 2011 to 2014 Hyundai Sonata, the 2013 and 2014 Hyundai Santa Fe Sport, the 2011 to 2014 Kia Optima, the 2012 to 2014 Kia Sorento, and the 2011 to 2013 Kia Sportage.
In total, Car and Driver reported that those recalls affected about 1.6 million cars. Hyundai and Kia recalled those vehicles because of manufacturing issues, according to Reuters. Those manufacturing issues could lead to bearing wear as well as engine failure. With that being said, Hyundai and Kia allegedly did not handle the recall well, and it’s why they were levied such a heavy fine, according to Reuters.
What Hyundai and Kia allegedly did and why they were fined
Car and Driver wrote that the National Highway Traffic Safety Administration, or NHTSA, launched an investigation and found that Hyundai and Kia didn’t recall their cars fast enough. On top of that, Car and Driver said that the automakers didn’t provide accurate information about the recalls. However, according to Reuters, Kia denied these allegations but agreed to this fine so that it could avoid fighting with the government.
In any case, in total, the two automakers were fined up to $210 million, which is a record amount, according to Reuters. Hyundai was given a $140 million fine, with $54 million that it’d have to pay up front, as well as a mandatory $40 million investment on “safety performance measures.” The other $46 million penalty is deferred, but Hyundai may have to pay it if it doesn’t meet the requirements of the agreement.
Kia was given a $70 million fine, with $27 million that it has to pay up front, as well as a mandatory $16 million investment on “specified safety measures.” The other $27 million is another deferred penalty that Kia may have to pay if it doesn’t meet the requirements of the agreement.
Hyundai’s mandatory $40 million safety investment will take the shape of a “safety field test and inspection laboratory” that will be built in the U.S. Furthermore, Hyundai will also be using new systems in order to analyze safety data in a better way. Plus, according to Car and Driver, Hyundai has issued a second recall as a precaution, and it has also set up a website to better inform drivers about the engine recall and related issues.
Not the last issue
Like Reuters wrote, this fine and its related recall has nothing to do with the other problems that Hyundai and Kia have been dealing with as of late. For example, in September 2020, about 600,000 Hyundai and Kia vehicles were recalled for a potential fire-related issue.
Additionally, Reuters wrote that in 2019, many U.S. states had launched investigations into the automakers over “potential unfair and deceptive acts” in regard to reports of vehicle fires. Furthermore, in 2018, Reuters said that federal prosecutors were investigating Hyundai and Kia over how they handled engine recalls. That investigation was a criminal investigation as well.