Korean automobile manufacturer Hyundai will pay a civil penalty of $17.35 million for failing to promptly report a safety-related defect in 2009-2012 Genesis models.
The company will also comply with the National Highway Traffic Safety Administration (NHTSA) oversight requirements pertaining to a consent order.
The defect centered on possible corrosion in critical brake system components that can result in reduced braking effectiveness, increasing the risk of a crash.
Speaking for NHTSA is U.S. Transportation Secretary Anthony Foxx, who said, "Safety is our top priority, and all automakers should understand that there is no excuse for failing to report a safety-related defect, as required by law. This administration will act aggressively and hold automakers accountable when they put the American public at risk."
What NHTSA discovered was that Hyundai knew in 2012 that brake fluids in the 2009-2012 Genesis did not sufficiently inhibit corrosion in key components of the braking system.
Despite this knowledge, rather than issuing a recall, Hyundai sent out only a Technical Service Bulletin (TSB) to dealers instructing them to change the brake fluid in these vehicles. The TSB did not elaborate on the possible consequences of failing to change the fluid - and even worse, Hyundai did nothing to notify owners of the potential hazard.
It was only when NHTSA threatened an investigation that Hyundai issued a recall, in October 2013. The recall, as discussed in Tech Times, covered 27,500 Genesis vehicles.
Fortunately, there have been no fatalities attributed to this defect. There have been six reports of collisions, and two injuries. As of January 2014, Hyundai had received 87 consumer complaints about difficult braking.
"Federal law requires automakers to report safety-related defects within five days. 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 NHTSA Acting Administrator David Friedman.
In complying with the consent order, Hyundai agreed to improve its processes for identifying, reporting and communication safety-related defects in a timely manner. The company will establish a U.S. Technical Committee to investigate and decide on possible Hyundai-specific recalls.
Other Hyundai recalls that were indeed reported promptly by the company include last month's recall, reported in Tech Times, of 883,000 Hyundai Sonata midsized sedans for an automatic transmission shift cable that could detach from the gear selection lever.
The company was just warming up, as less than a couple of days later they issued a separate recall for 420,000 Santa Fe crossovers, another batch of Sonatas and Veracruz SUVs. These vehicles have been recalled for rust, brake fluid and oil leaking problems respectively.