Hyundai fined $17.35 mn for failure to report brake defect

Hyundai Motor Co has been fined $17.35 million for not reporting a brake defect in time to US safety regulators, the National Highway Traffic Safety Administration said yesterday, Reuters reported.

According to NHTSA, the South Korean automaker delayed a recall for a defect that could cause corrosion in the braking system of about 43,500 Hyundai Genesis sedans from model years 2009 to 2012.

"Rather than issue a recall, Hyundai instructed dealers to change the brake fluid in affected vehicles without explaining the consequences of failing to change the brake fluid," NHTSA said in a statement. "Hyundai also did not inform Genesis owners of the potential safety consequences. Hyundai finally issued a recall of the affected vehicles in October 2013 as a result of a NHTSA investigation."

Though no deaths had been reported related to the issue, there had been two reports of injuries and six crashes, the NHTSA said.

It said automakers were required by federal law to report safety-related defects to NHTSA within five days.

David Zuchowski, head of Hyundai Motor America, said in a company statement, "Hyundai remains committed to making safety our top priority, and is dedicated to ensuring immediate action in response to potential safety concerns including the prompt reporting of safety defects."

According to Hyundai, most of the affected cars had been fixed.

The car maker had agreed with NHTSA to improve the manner in which it reported safety defects.

The fine comes at a time when some US politicians were calling for stiffer penalties on automakers and in some cases criminal prosecution for auto executives who were found to allow unsafe vehicles on the road.

This year alone saw General Motors Co recall around 25.5 million vehicles.

The company incurred the maximum penalty of $35 million for delaying the recall of cars with ignition switch defects that had led to the deaths of at least 13 people (See: GM fined $35 mn, more lawsuits await over failure to recall faulty cars).

"This Administration will act aggressively and hold automakers accountable when they put the American public at risk," said US transportation secretary Anthony Foxx in the NHTSA statement.

According to the NHTSA, the defect involved corrosion in critical brake system www.weartv.com reported. The agency said Hyundai was aware of the problem in 2012, but rather than issuing a recall it instructed dealers to fix the problem without explaining the consequences.

The company, however, did recall 27,000 cars last year, just hours ahead of the government opening an investigation (Hyundai to recall 27,500 Genesis luxury sedans in the US over faulty brakes).