Federal automobile regulators have imposed a fine of $17.35 million on Hyundai after it was found slow to report a safety defect in the braking system of its cars.
In 2012, Hyundai received information that the brake fluid used for the construction of some Genesis vehicles with model years 2009 to 2012 may not prevent corrosion effectively, leading to faulty brake systems.
However, instead of issuing a recall order immediately, Hyundai instead just informed dealers to change the brake fluid used by the affected cars, with no explanation of the consequences of not replacing the brake fluid. The car company also did not reach out to owners of Genesis cars regarding the potential safety risks.
It was not until October of last year when Hyundai issued a recall order for the affected Genesis vehicles.
Around 27,500 Genesis cars were involved in the recall, with the National Highway Traffic Safety Administration of the United States promptly launching an investigation on the reported issue.
"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.
However, former NHTSA physical scientist and current car safety advocate Louis Lombardo said that the penalty imposed on Hyundai is "a slap on the wrist for a company this size."
According to Hyundai Motor America senior group manager Jim Trainor, the company has a commitment of acting immediately on potential safety problems, including the immediate reporting of vehicular defects.
"In order to mitigate a situation like this in the future, Hyundai is instituting new organizational and process improvements, and enhancing the ability of its U.S. leadership team to readily respond to regulatory reporting requirements," Trainor wrote in an email.
Before the recall order for the affected Genesis vehicles was issued, the NHTSA had received 23 complaints regarding braking issues, with drivers reporting that they had to exert more force in stepping on the pedal to activate the brakes of the car. The agency also reported an incident when a Genesis driver crashed into a stationary vehicle due to the brakes not activating, and another incident when a Genesis driver ad to use the emergency brakes to stop the car.
No injuries related to the issue were reported.
The fine that the NHTSA imposed on Hyundai follows a similar penalty imposed by the agency in May on General Motors, which failed to report an ignition switch defect in some of its cars for over a decade, with the defect responsible for 13 fatalities. General Motors was fined the maximum penalty of $35 million.
A proposal submitted to Congress by the NHTSA is seeking to raise the maximum penalty that the agency can levy on future cases to $300 million.
