Hyundai will pay $17 million for being slow to report a brake defect to federal regulators. The defect in 2009-2012 Hyundai Genesis vehicles involves corrosion in critical brake system components that can result in reduced braking effectiveness and increase the risk of a crash.
"Safety is our top priority, and all automakers should understand that there is no excuse for failing to report a safety-related defect, as required by law," said U.S. Transportation Secretary Anthony Foxx. "This Administration will act aggressively and hold automakers accountable when they put the American public at risk."
The National Highway Traffic Safety Administration (NHTSA) found that Hyundai had been aware in 2012 that brake fluids used in the Genesis did not sufficiently inhibit corrosion in key components of the vehicle’s brake system.
“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,” David Zuchowski, CEO of Hyundai Motor America, said in a prepared statement.
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. 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.
While there have been no fatalities relating to this safety defect, six consumers reported collisions, including two reports of injuries, NHTSA said. As of January 14, 2014, Hyundai had received 87 consumer complaints about Genesis vehicles, most of which suggest increased difficulty in braking.
"Federal law requires automakers to report safety-related defects to NHTSA within five days, and neither NHTSA nor the American public will accept anything less," said NHTSA Acting Administrator David Friedman. "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."
As part of a consent order, Hyundai has agreed to make improvements to its processes for identifying, reporting, and communicating safety-related defects in a timely manner.