Hyundai To Pay $54M Penalty For Faulty Santa Fe, Sonata Engines

Three years ago, Hyundai and Kia recalled 1.5 million vehicles in the United States, Canada, and South Korea. It's one of the biggest recalls that year, which affected 1.19 million units in the U.S. and over 114,000 vehicles in Canada.

The issue? Machining errors during vehicle manufacturing that could cause "premature bearing wear within the engine," as the National Highway Safety Traffic Administration pointed out. Affected vehicles were certain 2011-2014 Hyundai Sonata and 2013-2014 Santa Fe Sport vehicles, along with other Kia models. The company was compelled to replace the engines, free of charge, as part of the service campaign.

That recall has been concluded, as announced by Hyundai in a press release. As part of the agreement, the Korean marque will pay a cash penalty of $54 million and will have to make investments of $40 million to improve its safety operations. Hyundai will also be subject to a possible deferred payment of $46 million dependent upon the company's compliance with an NHTSA Consent Order.

In case you're wondering, the $40 million investment would have to go to building a safety field test and inspection laboratory in the U.S., as well as implementing new IT systems for better safety data analysis and potential safety issues identification.

"Customer safety is our highest priority and we are taking immediate action to enhance our response to potential safety concerns," said Brian Latouf, chief safety officer, Hyundai Motor North America.

"We value a collaborative and cooperative relationship with the U.S. Department of Transportation and NHTSA, and will continue to work closely with the agency to proactively identify and address potential safety issues. We are committed to a best in class U.S. safety office."