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Feds order Hyundai, Kia to pay up to $210 million penalty for engine defect

NHTSA cites delayed recalls & "inaccurate" reports
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Posted at 3:09 PM, Nov 27, 2020
and last updated 2020-11-30 15:08:40-05

TAMPA, Fla. — Federal regulators assessed a combined $210 million penalty against Hyundai and Kia for failing to timely recall 1.6 million vehicles and not providing accurate information to federal regulators. The penalty includes fines and safety improvements and can be reduced to $137 million if the automakers meet certain conditions.

The National Highway Traffic Safety Administration on Friday announced consent orders with Hyundai Motor America, Inc. and Kia Motors America, Inc. saying the order was "related to recalls for vehicles equipped with Theta II engines."

RELATED: UP IN FLAMES, ABC Action News

ABC Action News has been investigating the defect and car fires in Kia and Hyundai vehicles since 2018 and had days ago pressed NHSTA with questions about why they had not yet taken action against the companies.

In addition to monetary penalties, Kia will be creating a new safety office and Hyundai will build a test facility in U.S. The companies will also enhance data analytics programs to detect safety-related concerns.

Under the agreements, the companies will each retain an independent, third-party auditor who will reporter directly to NHTSA.

RELATED: Kia, Hyundai agree to settle lawsuit over vehicle fires and engine defects; owners will split $760M settlement

“Safety is NHTSA’s top priority,” NHTSA Deputy Administrator James Owens said in a statement. “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.”

The Kia consent order is for two years, with an option for NHTSA to extend the order for an additional year. The Hyundai consent order is for three years, with an option for NHTSA to extend for an additional year.

NHTSA’s Office of Defects Investigation will continue to investigate allegations of non-crash fires in Hyundai and Kia vehicles, NHTSA said. That investigation is not affected by the consent orders.

“Customer safety is our highest priority and we are taking immediate action to enhance our response to potential safety concerns,” Brian Latouf, chief safety officer, Hyundai Motor North America said in a statement. “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.”

Hyundai has elevated its customer service response for recalls with dedicated staff and resources. For more information on engine recalls, visit https://hyundaiengineinfo.com/.

Kia issued a statement denying the allegations but agreed "to settle the matter to avoid a protracted dispute with the government." The company said the settlement was "the result of good-faith efforts between the parties to address NHTSA’s concerns..."