Hyundai, Kia Plan Major Car Recall Over Engine Issue, Fox Business
Hyundai, Kia Plan Major Car Recall Over Engine Issue
The logo of Hyundai Motor is seen on a wheel of a car at a Hyundai dealership in Seoul ( Copyright Reuters two thousand seventeen )
Hyundai Motor and Kia Motors are expected to recall more than a million vehicles in South Korea and the United States due to engine issues, the latest deepthroat for two firms already fighting in key markets.
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The recall, which could cost the two firms hundreds of millions of dollar each, comes as Hyundai and Kia face a acute drop in China sales and sluggish request in the United States and South Korea.
The two car companies said on Friday they will recall 171,348 vehicles in South Korea because of a manufacturing problem, which leads to possible engine stalling.
The South Korean automakers have also submitted plans to U.S. authorities to recall an unidentified number of vehicles in the United States over a “similar” engine issue, a spokesperson at the South Korean duo said.
Yonhap News Agency, citing Hyundai, said the U.S. recall would reach some 1.Trio million vehicles, an amount close to the duo’s annual U.S. sales.
The U.S. recall alone could cost the companies as much as two hundred fifty billion won ($220.Nineteen million) each, hitting earnings, said Koh Tae-bong, an analyst at Hi Investment & Securities.
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A Hyundai official declined to confirm to Reuters the expected cost of the U.S. recall, nor the number of vehicles involved.
The recall helped shove Hyundai Motor shares lower by as much as Two.7 percent, compared to a 0.Four percent decline in the broader market. Kia Motors were down 1.1 percent.
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POSSIBLE ENGINE STALLING
The recall in South Korea covers Hyundai’s Sonata, Grandeur sedans and Kia’s K5, K7 and Sportage models tooled with a 2-liter or Two.4-liter Theta two gasoline engine produced before August 2013, the South Korean transport ministry said.
The ministry said metal debris in crankshafts could cause engine harm, leading to possible engine stalling.
“The recall is related to a manufacturing process problem, not the structural problem of Theta 2GDi engines and we have ended improvements through adequate measures,” the companies said in a statement.
Hyundai will substitute a defective engine with a fresh one after inspection. The recall will commence on May 22.
In 2015, Hyundai Motor said it would recall 470,000 Sonata sedans in the United States to substitute faulty engine parts, sparking questions of safety back home.
But Hyundai and Kia has said that engines produced at domestic factories were not defective. They instead extended the warranty period for five Theta 2-equipped models in South Korea.
The Hyundai spokesperson said the latest recall involves a fresh problem.
($1 = 1,135.4000 won)
(Reporting by Hyunjoo Jin; Editing by Randy Fabi)