Hyundai, Kia under federal investigation for engine defect recalls, report says

The investigation is looking at whether the automakers conducted their recalls to the best of their abilities.

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Andrew Krok
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and have recalled over 1 million vehicles for engine defects that could potentially cause vehicle fires, but both Korean automakers are reportedly under federal investigation to determine whether or not they could have done a better job.

The US Attorney's Office for the Southern District of New York has launched an investigation into how Hyundai and Kia handled its engine-defect problem, Reuters reports, citing a source with knowledge of the matter. Both Hyundai and Kia declined to comment to Roadshow.

The US Department of Justice did not immediately respond to a request for comment, but a DOJ spokesperson declined to comment to Reuters, saying that it usually doesn't confirm or deny such investigations, if they exist.

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The Sonata is one of a few Hyundai models with its Theta II engine, which is also shared with its sister automaker Kia.


Reuters' source says the DOJ is working with the National Highway Traffic Safety Administration on the investigation. The source also told Reuters that while charges are certainly possible, they're not a given, but Hyundai and Kia could be made to pay some "hefty fines" if things move in that direction. In the past, Toyota agreed to a $1.2 billion settlement with the US government over its "unintended acceleration" debacle, and VW got slapped with a $4.3 billion fine for its role in Dieselgate.

This whole thing started in 2015, when Hyundai recalled 470,000 vehicles equipped with the "Theta II" engine, because manufacturing debris could cause engine problems. Following that recall, a whistleblower flew to Washington from South Korea to claim that Hyundai and Kia could have recalled way more cars. Kia finally started a recall, and Hyundai expanded its own, but that delay caught NHTSA's attention, which launched an investigation into the matter.

The Center for Auto Safety, a watchdog not affiliated with any automaker, called for Hyundai and Kia to recall even more vehicles. The Center continues to receive reports of engine fires that it believes are related to the manufacturing-debris problem, something NHTSA's own investigation alludes to. Both automakers were invited to appear in front of the Senate Commerce Committee, but that hearing has been postponed for now.

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