Hyundai, Kia to Recall 1.5M Vehicles in US & South Korea

Hyundai, Kia to Recall 1.5M Vehicles in US & South Korea

Hyundai Motor Company and Kia Motors today announced a recall of nearly 1.5 million vehicles in the United States and South Korea due to engine issues.

"The recall is related to a manufacturing process problem, not the structural problem of Theta 2GDi engines and we have completed improvements through appropriate measures," the companies said in a statement.

The recall could cost the two companies hundreds of millions of dollars each, according to a report from Reuters, with growing concerns over declining sales in China and sluggish demand in the United States and South Korea. Analysts say the US recall alone could cost the companies as much as €207 billion each.

The two companies are recalling 171,348 vehicles in South Korea in total. A spokesperson for the firms said the vehicles affected include Hyundai's Sonata, Grandeur sedans and Kia's K5, K7 and Sportage models equipped with a 2-litre or 2.4-litre Theta 2 petrol engine produced before August 2013. The US authorities have also been notified about a recall over “similar” engine issues.

This is not the first time the companies have been forced to recall vehicles due to defects. In 2015, Hyundai recalled 470,000 Sonata sedans to replace faulty engine parts. A Hyundai spokeswoman said the latest recall is unrelated. Interestingly, a South Korean minister contradicted this and said they were similar issues.

The companies have yet to comment on the cost of the recall. But they did announce the recall in South Korea will start on May 22.

It has been a bad couple of weeks for automakers. Last week, Ford Motor announced it would spend up to $295 million to fix two separate issues affecting 440,000 vehicles in North America. The United States’ second largest automaker had previously recalled nearly 4 million vehicles for door latch issues

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Published by Research and Markets