Hyundai Motor America agreed to settle the $140 million fine meted out by the National Highway Traffic Safety Administration (NHTSA) over what it decided was poor handling of engine recalls issued by the company.
The NHTSA investigated the matter when Hyundai’s 2.0- and 2.4-liter Theta II engines were reported as defective. The engines in question, equipped in the 2011-2014 Hyundai Sonata and 2013-2014 Santa Fe Sport, were said to have metal debris that could lead to premature bearing wear and a possible engine failure.
According to NHTSA, Hyundai did not recall the 1.6 million vehicles plagued with the problem “in a timely fashion” and that it did not release accurate information about the recalls.
The government agency issued a cash penalty of $54 million on Hyundai, as well as other fines that ballooned to $140 million. Hyundai has reportedly agreed to the conditions, including allocating funds into the improvement of its safety operations ($40 million) and a potential additional fine of $46 million that will depend on how well Hyundai meets the requirements set forth by NHTSA.
In a separate Consent Order issued by the agency, Kia was also fined $27 million in cash penalties, a $16 million charge for the improvement of its safety processes, and a potential $27 million that will be determined at a later date.
The fines meted out on Kia are tied to a recall involving the 2011-2014 Optima, 2012-2014 Sorento, and 2011-2013 Sportage equipped with the same 2.0- and 2.4-liter Theta II engines.
In a statement, Hyundai shared it will create new IT systems “to better analyze safety data and identify potential safety issues.” The automaker also said it is planning to set up a new field testing and laboratory in the United States.
Moreover, Hyundai has issued a second recall for the vehicles affected, including those whose engines have already been replaced, “out of an abundance of caution.” A website dedicated to providing consumers with information about the company’s engine recalls has also been launched.