Hyundai Fined $17 Million for Failing to Report Brake Corrosion Problem

hyundaiThis past Thursday, the National Highway Traffic Safety Administration announced that Hyundai would be fined $17 million as a federal fine for not immediately reporting a brake problem they realized was in the Hyundai Genesis cars.

Around 43,500 Genesis cars, from the model years of 2009 to 2012, are covered by the federal fine. Hyundai realized in 2012 that there was a defect with the break system. Corrosion in the brake system meant that it could be more difficult for drivers to stop — upping the chances of a car crash.

Once such a flaw was discovered, Hyundai should have issued a prompt recall — in which any car owners would be asked to take in their cars and have the part changed out for free. Instead, Hyundai issued a “Technical Service Bulletin,” which instructed dealers to replace brake fluid if they noticed the issue. Hyundai did not inform Genesis owners of the problem, according to the safety agency, prompting an investigation by NHTSA. Hyundai decided to recall the cars in Oct. 2013 as a result of the brake defect investigation.

According to the NHTSA’s investigation, Hyundai was aware that the provided break fluid was not enough to sufficiently prevent corrosion, and in only issuing the bulletin to dealers, the company did not make safety a top priority in their vehicles. Although there have been no fatalities as a result of the defect, there have been six collisions, and two injuries.

“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 David Friedman, who is currently the NHTSA acting administrator.

Hyundai has signed a consent decree in which they promise to make improvements to their identification process for reporting any and all safety-related defects, and the company plans to meet regularly with NHTSA in order to discuss safety issues and proper reporting.

Although $17 million is no small fee, it pales in comparison to some of the other safety cases that came through this year. Many automakers have been struggling to establish an adequate report system for safety issues. Toyota Motor Corp. agreed to pay a $1.2 billion fine earlier this year for its reporting of sudden acceleration issues — the largest penalty of its kind in U.S. history.

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