The U.S. units of Kia and Hyundai have been ordered to pay $210 million in civil fines for failing to issue a timely recall of around 1.6 million vehicles and not giving out accurate details to government auto regulators.
The National Highway Traffic Safety Administration stated that the two affiliated Korean auto manufacturers agreed to consent orders after the agency said they had inaccurately disclosed some information regarding the recalls.
The companies will put closure on a three-year federal inquiry into their behavior related to the recalls of several models that date back to the 2011 model year.
Hyundai's problem involved the company's 2.0 and 2.4-liter Theta II engines in the 2011-2014 Hyundai Sonata and the 2013-2014 Santa Fe SUV, in which metal particles formed during machining procedures at the auto facility caused premature bearing defects and possible engine malfunction.
Kia, through a separate consent order, was penalized $27 million in addition to another possible fine of $27 million, as well as the requirement to settle $16 million in fines for safety process enhancement, in relation to a separate recall that includes the company's 2011-2014 Optima, 2012-2014 Sorento, and 2011-2013 Sportage, also with the same engine specifications, NHTSA's order disclosed.
According to NHTSA Deputy Administrator James Owens, it is crucial that carmakers "appropriately recognize the urgency of their safety recall responsibilities and provide timely and accurate information to the agency about all safety issues," CBS News quoted Owens as saying in a statement.
On top of the monetary fines, Kia will be setting up a new safety office headed by a chief safety officer, and Hyundai will construct a test center in the U.S. The two carmakers will also boost their data analytics software to monitor safety-linked concerns accurately.
Both auto manufacturers will have to employ an independent third-party auditor to examine their safety standards, and they committed to organizational upgrades to investigate possible safety issues.
Hyundai agreed to a penalty of $140 million, including an upfront settlement of $54 million, an obligation to spend $40 million on safety performance protocols, and an extra $46 million deferred fine if the company fails to comply with requirements.
The settlements are separate from an ongoing probe by the regulator into non-crash fires in certain models of the Hyundai and Kia vehicles, some of which have recalled engines.
Engine defects with Kia and Hyundai cars have proved to be a major headache for the companies for over five years, dealing a heavy blow on the owners.
