Hyundai To Pay $ 54 Million Penalty In US For Defective Engines

The Hyundai Group had issued one of its biggest recalls three years back in the United States, Canada and South Korea. The recall included 1.19 million cars in the US and over 1.14 lakh units in Canada. The vehicles were recalled because of machining errors during vehicle manufacturing that could have led to "premature bearing wear within the engine," as pointed out by the National Highway Safety Traffic Administration. The Hyundai Sonata and Santa Fe models which were manufactured between 2011 and 2014 were impacted and in a service campaign, engines of these units had to be replaced, free of charge. But the matter hasn't ended here. The Korean carmaker is now paying a penalty and will have to overhaul its manufacturing plants.

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Engines of the Hyundai Sonata were replaced as well during the service campaign.

The company has said that it will be paying a cash penalty of $54 million and will be making a further investment of $40 million to improve the safety standards in its operations. The investment will be used to develop a safety field test and inspection laboratory in the US along with setting up the new IT system for batter safety data procurement and analysis and potential safety issue identification.

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Some Kia models were also recalled to fix the same issue.

Brian Latouf, chief safety officer, Hyundai Motor North America said, "Customer safety is our highest priority and we are taking immediate action to enhance our response to potential safety concerns. 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." Along with Hyundai, some models of Kia Motors were impacted as well and both carmakers agreed to pay a civil penalty of $ 210 million.