Hyundai will pay a $US17.35 million ($A18.7m) civil penalty for failing to more quickly report and carry out a safety recall for a brake problem with its Genesis sedan in the US.
In a settlement with North America's National Highway Traffic Safety Administration, the company has also agreed to sweeping new requirements by the US safety regulator to better identify, report and communicate safety-related defects.
NHTSA said the Korean car-maker delayed a recall for an issue that could cause corrosion in the braking system of 43,500 Hyundai Genesis sedans covering the 2009-2012 model years.
Hyundai recalled the Genesis in October 2013 to fix a brake system component that could reduce baking performance if it became corroded by incompatible brake fluid.
According to the NHTSA, there were six consumer reports of collisions due to the problem, causing two injuries but no fatalities.
The problem does not affect the second-generation Genesis sedan, which will be the first Genesis model to be sold in Australia – from later this year.
Hyundai notified its dealers via a technical service bulletin in March 2013, when it told them to replace the brake fluid in affected vehicles, but didn’t conduct a recall or tell vehicle owners about the safety issue until after the NHTSA opened of an investigation.
“Hyundai failed to act to protect their customers and others that were harmed in an accident, and must change the way they deal with all safety-related defects,” said acting NHTSA administrator David Friedman.
The NHTSA said Hyundai learned of the potential problem via a Korean supplier in 2012 after internal testing and by January this year had received 87 braking-related consumer complaints from Genesis owners.
By US federal law, car-makers are required to report safety-related defects to the NHTSA within five days.
The NHTSA said the same brake component was used in vehicles manufactured by General Motors, which in 2012 issued safety recalls in 67 countries – including Australia, where more than 51,000 Korean-made Barina, Viva, Epica and Captiva models were affected.
NHTSA documents show GM recalled cars in various markets two years ago to replace the brake fluid and, if necessary, replace the ABS module in vehicles that combined the suspect brake fluid with the same hydraulic electronic control unit used in the Hyundai Genesis.
As part of its agreement with the NHTSA, Hyundai Motor America has also agreed to make decisions relating to the need for a safety recall in the US independently and without approval from its Korean parent company.
It will also form a US-based technical committee to review and decide potential safety recalls and service campaigns and give the head of the US technical committee direct access to the board of directors of HMA.
According to Automotive News, Hyundai will "not delay holding any meeting of the technical committee or to decide whether or not to recommend or conduct a safety recall because Hyundai has not identified the precise cause of a defect, a remedy for the defect, or prepared a plan for remedying the defect.
It will also work with the NHTSA to explore creative ways to increase recall response rates and meet with the NHTSA on a monthly basis for one year "to report, in a manner specified by NHTSA, on new technical service bulletins or other dealer communications, Hyundai’s decision-making associated with safety related or high warranty claims or potentially safety-related field reports, and any other actual or potential safety-related defects."
“Hyundai remains committed to making safety our top priority, and is dedicated to ensuring immediate action in response to potential safety concerns including the prompt reporting of safety defects,” said David Zuchowski, CEO of Hyundai Motor America, in a statement.
“In order to mitigate a situation like this in the future, Hyundai is instituting new organisational and process improvements, and enhancing the ability of the US leadership team to readily respond to regulatory reporting requirements.”
GM was fined a record $US35 million – the maximum currently permissible -- by the NHTSA for the delayed recall of 2.6 million vehicles with faulty ignition switches earlier this year.
It also paid another $US420,000 in fines for failing to answer questions about the recall by a deadline set by the agency. GM is also subject to additional safety oversight as part of a consent order with the NHTSA.
In March this year Toyota agreed to pay a record $US1.2 billion ($A1.32b) settlement following a criminal investigation into its handling of the company’s 2009-2010 recalls to fix sticking accelerator pedals and faulty floor mats in more than 10 million vehicles.
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In a settlement with North America's National Highway Traffic Safety Administration, the company has also agreed to sweeping new requirements by the US safety regulator to better identify, report and communicate safety-related defects.
NHTSA said the Korean car-maker delayed a recall for an issue that could cause corrosion in the braking system of 43,500 Hyundai Genesis sedans covering the 2009-2012 model years.
Hyundai recalled the Genesis in October 2013 to fix a brake system component that could reduce baking performance if it became corroded by incompatible brake fluid.
According to the NHTSA, there were six consumer reports of collisions due to the problem, causing two injuries but no fatalities.
The problem does not affect the second-generation Genesis sedan, which will be the first Genesis model to be sold in Australia – from later this year.
Hyundai notified its dealers via a technical service bulletin in March 2013, when it told them to replace the brake fluid in affected vehicles, but didn’t conduct a recall or tell vehicle owners about the safety issue until after the NHTSA opened of an investigation.
“Hyundai failed to act to protect their customers and others that were harmed in an accident, and must change the way they deal with all safety-related defects,” said acting NHTSA administrator David Friedman.
The NHTSA said Hyundai learned of the potential problem via a Korean supplier in 2012 after internal testing and by January this year had received 87 braking-related consumer complaints from Genesis owners.
By US federal law, car-makers are required to report safety-related defects to the NHTSA within five days.
The NHTSA said the same brake component was used in vehicles manufactured by General Motors, which in 2012 issued safety recalls in 67 countries – including Australia, where more than 51,000 Korean-made Barina, Viva, Epica and Captiva models were affected.
NHTSA documents show GM recalled cars in various markets two years ago to replace the brake fluid and, if necessary, replace the ABS module in vehicles that combined the suspect brake fluid with the same hydraulic electronic control unit used in the Hyundai Genesis.
As part of its agreement with the NHTSA, Hyundai Motor America has also agreed to make decisions relating to the need for a safety recall in the US independently and without approval from its Korean parent company.
It will also form a US-based technical committee to review and decide potential safety recalls and service campaigns and give the head of the US technical committee direct access to the board of directors of HMA.
According to Automotive News, Hyundai will "not delay holding any meeting of the technical committee or to decide whether or not to recommend or conduct a safety recall because Hyundai has not identified the precise cause of a defect, a remedy for the defect, or prepared a plan for remedying the defect.
It will also work with the NHTSA to explore creative ways to increase recall response rates and meet with the NHTSA on a monthly basis for one year "to report, in a manner specified by NHTSA, on new technical service bulletins or other dealer communications, Hyundai’s decision-making associated with safety related or high warranty claims or potentially safety-related field reports, and any other actual or potential safety-related defects."
“Hyundai remains committed to making safety our top priority, and is dedicated to ensuring immediate action in response to potential safety concerns including the prompt reporting of safety defects,” said David Zuchowski, CEO of Hyundai Motor America, in a statement.
“In order to mitigate a situation like this in the future, Hyundai is instituting new organisational and process improvements, and enhancing the ability of the US leadership team to readily respond to regulatory reporting requirements.”
GM was fined a record $US35 million – the maximum currently permissible -- by the NHTSA for the delayed recall of 2.6 million vehicles with faulty ignition switches earlier this year.
It also paid another $US420,000 in fines for failing to answer questions about the recall by a deadline set by the agency. GM is also subject to additional safety oversight as part of a consent order with the NHTSA.
In March this year Toyota agreed to pay a record $US1.2 billion ($A1.32b) settlement following a criminal investigation into its handling of the company’s 2009-2010 recalls to fix sticking accelerator pedals and faulty floor mats in more than 10 million vehicles.
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