Federal regulators last week slapped Hyundai with a $17.35 million fine for taking too long to report a safety defect in its 2009-12 model year Genesis sedans, signaling a strict reading of safety laws in the wake of General Motors’ ignition-switch crisis.
At issue was a brake problem in some 43,500 cars that led to 87 consumer complaints, six reported accidents and two injuries, but no fatalities. Hyundai ultimately recalled the cars in October 2013.
As with GM, timing was the key issue: Hyundai failed to notify regulators within five days of learning of the potential defect, as required by law.
Beyond the fine, Hyundai also agreed to revamp its safety procedures and endure more rigorous oversight from the National Highway Traffic Safety Administration. The penalties are similar to those imposed on GM in May, when it was fined $35 million over the ignition-switch failures. In both cases, the fines were the maximum allowable under the law in place at the time.
Taken together, the actions provide a clearer picture of how NHTSA is approaching enforcement, with a focus on how quickly defects are addressed, how promptly regulators are notified and what information is given to dealers and consumers.
The agency has been under pressure in recent months to explain why it didn’t act sooner and more forcefully in the GM ignition case. NHTSA Acting Administrator David Friedman is expected to testify before a Senate oversight subcommittee about the agency’s role as early as next month.
According to its consent agreement with NHTSA, Hyundai learned of the brake problem in 2012 from a supplier, which also provided parts to GM.
Both automakers were notified at the same time, but GM was quicker to issue a recall and more forthcoming in communicating the risks — possible brake-line corrosion that could make it harder to stop the vehicle — to dealers and consumers.