U.S. safety regulators have opened a formal investigation into the recall of nearly 1.7 million vehicles by Hyundai Motor Co (005380.KS) and affiliate Kia Motor Corp (000270.KS) over engine defects, according to filings published Saturday.
A South Korean whistleblower reported concerns last year to the U.S. National Highway Traffic Safety Administration (NHTSA), which will probe the timeliness of three recalls carried out in the United States and whether they covered enough vehicles.
Fines could be imposed on the automakers if the NHTSA determines the recalls were not conducted properly. The agency did not immediately comment on the probe.
A Hyundai spokesman in Seoul the company “has conducted recalls in compliance with U.S. regulations and procedure” and will “sincerely” cooperate with the investigation. In 2015, Hyundai recalled 470,000 U.S. Sonata sedans, saying engine failure would result in a vehicle stall, increasing the risk of a crash. At that time, affiliate Kia did not recall its vehicles, which share the same “Theta II” engines.
Kim Gwang-ho, then an engineer at Hyundai, flew to Washington in August 2016 to tell NHTSA the companies should have recalled more vehicles over the problem, citing an internal report. He also reported several alleged safety lapses to both U.S. and South Korean authorities.
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