The National Highway Traffic Safety Administration announced consent orders this week with Hyundai and Kia related to recalls of vehicles equipped with the Theta II engines. The automakers were hit with combined penalties amounting to $210 million. The NHTSA found that Hyundai and Kia conducted untimely recalls of over 1.6 million vehicles that used the Theta II engines.
The NHTSA also found that the automakers reported certain inaccurate information to it during the recalls. The consent orders establish monetary and non-monetary measures that will enhance Kia and Hyundai’s safety practices. Kia will create a new US safety office headed by a Chief Safety Officer. Hyundai will build a US test facility for safety investigations.
Both companies have promised to develop and implement a sophisticated data analytics program to better detect safety concerns. The agreements will also see each company retain an independent, third-party auditor who will directly report to the NHTSA. These auditors will conduct comprehensive reviews of the Safety Act practices and compliance with the consent order.
The NHTSA is also making both companies commit to substantial organizational improvements to enhance their ability to identify and investigate potential safety issues in the US while consistently and transparently communicating with the NHTSA. Hyundai is subject to a total civil penalty of $140 million with a $54 million upfront payment. It’s obligated to spend another $40 million on specified safety performance measures and an additional $46 million deferred penalty that will become payable if specified conditions aren’t satisfied.
Kia is subject to the total civil penalty of $70 million with a $27 million upfront payment. It’s obligated to spend another $16 million on specified safety performance measures with a $27 million deferred penalty payable if certain conditions aren’t satisfied. The consent orders don’t impact other ongoing investigations by the NHTSA regarding allegations of fires not related to crashes in Hyundai and Kia vehicles equipped with the Theta II engines.