Hyundai to pay $17.35 million fines for failure to report defect in a timely manner

Article by Christian A., on August 10, 2014

Hyundai Motor Co. has agreed to pay $17.35 million in fines for failing to report a brake defect and carry out a recall in a timely manner to the National Highway Traffic Safety Administration. The South Korean carmaker has also agreed to additional government oversight for better identification, reporting, and communication of safety-related defects.

According to NHTSA, Hyundai delayed a recall for an issue that could result to corrosion in the braking system of around 43,500 Hyundai Genesis sedans (model years 2009-2012).

Hyundai recalled the Genesis in October 2013 to fix a possible brake system component that could become corroded due to incompatible brake fluid, which could downgrade braking performance.

Zero deaths but six consumers reported collisions with regards to the issue, including two pertaining of injuries, the agency said. David Friedman, NHTSA’s acting administrator, said that the carmaker failed to act to protect its customers and others who were harmed in an accident.

He added that Hyundai must change the way it deals with all safety-related defects. In March last year, Hyundai issued a technical service bulletin to dealers to replace the brake fluid in affected vehicles. When NHTSA opened a probe into the problem, the carmaker then issued a recall.

A South Korean supplier informed Hyundai of the issue in 2012 after conducting internal testing by the supplier, according to NHTSA said. Federal law is requiring carmakers to report safety-related issue to NHTSA within five days.

As of Jan. 14, the carmaker had received 87 consumer complaints related to the vehicles, most of which indicated harder time in braking, the agency said in a statement.

Hyundai Motor America chief executive David Zuchowski said in a statement that the carmaker remains committed to making safety its top priority.

He added that to mitigate a similar situation in the future, the South Korean carmaker is instituting new organizational and process improvements while enhancing the ability of its leadership team in the US to “readily respond to regulatory reporting requirements.”

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