Hyundai Motor America has resolved an inquiry by the National Highway Traffic Safety Administration related to recalls for vehicles equipped with Theta II engines. The combined penalties amount to $210 million.
The consent order reflects the agency’s assessment that both Hyundai and Kia conducted untimely recalls of more than 1.6 million vehicles equipped with the Theta II engines and inaccurately reported certain information to NHTSA regarding the recalls.
The Hyundai consent order is in regards to its 2015 and 2017 recalls involving 2011-2014 Sonata and 2013-2014 Santa Fe Sport vehicles. These recalls addressed manufacturing issues that could lead to bearing wear and engine failure.
As part of the agreement, Hyundai will pay a cash penalty of $54 million, make investments of $40 million to improve its safety operations and be subject to a possible deferred payment of $46 million dependent upon the company’s compliance with an NHTSA consent order, which is for three years with an option to extend the order for an additional year if warranted.
The investments in Hyundai’s safety operations include building a safety field test and inspection laboratory in the U.S. and implementing new IT systems to better analyze safety data and identify potential safety issues.
“Customer safety is our highest priority, and we are taking immediate action to enhance our response to potential safety concerns,” said Brian Latouf, chief safety officer of Hyundai Motor North America. “We value a collaborative and cooperative relationship with the U.S. Department of Transportation, and NHTSA and will continue to work closely with the agency to proactively identify and address potential safety issues. We are committed to be a best-in-class U.S. safety office.”
Under the Kia consent order, the company will pay an upfront payment of $27 million, an obligation to expend an additional $16 million on specified safety performance measures and an additional $27 million deferred penalty that may become payable if specified conditions are not satisfied. The Kia consent order is for two years, with an option to extend the order for an additional year if warranted.
As part of Kia’s penalty, the company will be creating a new U.S. safety office headed by a chief safety officer.
In addition, both Hyundai and Kia will retain an independent, third-party auditor, who will directly report to NHTSA and will conduct a comprehensive review of the company’s Safety Act practices and compliance with the consent order.
Hyundai Motor Manufacturing Alabama is Hyundai’s first assembly and manufacturing plant in the U.S. It assembles the Sonata and Elantra sedans and Santa Fe SUV. In addition, starting in 2022, HMMA will be adding the Tucson and Santa Cruz SUVs to the Montgomery plant’s production. The plant also produces the engines that power these vehicles, as well as vehicles at its sister Kia plant in Georgia.
Kia Motors Manufacturing Georgia, in West Point, manufactures the Telluride and Sorento SUVs and the Optima sedan.