Hyundai, Kia Recall 1.7 Million Vehicles on Electronics[U]

Hyundai Motor Co. (005380), South Korea’s largest automaker, and its affiliate Kia Motors Corp. (000270) recalled more than 1.7 million vehicles from five model years for electronic defects. Their shares fell.
Hyundai dropped 3.2 percent to 211,000 won, poised for its steepest loss since Jan. 25, as of 9:38 a.m. on the Korea Exchange. Kia sank 3.1 percent, while the benchmark Kospi index fell 1 percent.

The frame of a 2011 Hyundai Sonata is welded by robots on the assembly line in the body weld building at the Hyundai Motor Manufacturing Alabama (HMMA) plant in Montgomery, Alabama on Oct. 13, 2010. The recall includes 2011 Sonatas.

Kia Motors Corp., also based in Seoul, is recalling 623,658 vehicles for the same defect.

About 1.1 million vehicles are affected by a possible malfunction causing faults including preventing brake lights from illuminating and the cruise control from turning off, raising the risk of a crash, Hyundai said on the U.S. National Highway Traffic Safety Administration website. Kia is recalling 623,658 vehicles for the same defect. The automakers combined sold 1.26 million cars and light trucks in the U.S. last year.

“The latest recall doesn’t seem to be an issue that could hurt brand image of the South Korean carmakers in the U.S.,” Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $29 billion, said by phone today. “Given that the actual costs they have to cover are marginal, today’s share-price drop is excessive.”

The malfunctioning switches cause affected electronics to not work intermittently and don’t affect brake performance, Jim Trainor, a U.S.-based spokesman for Hyundai, said in an e-mail.

Affected Models
The recall includes Accents and Tucsons from model years 2007 to 2009, Elantras from 2007 to 2010, Santa Fes from 2007 to 2011, Veracruzes from 2008 to 2009, 2010 to 2011 Genesis Coupes and 2011 Sonatas. The Elantra is Hyundai’s best-selling car in the U.S. this year, according to Autodata Corp., an auto researcher.
Kia’s recall includes Rondos and Sportages from model years 2007 to 2010, Sorentos from 2007 to 2011, Sedonas from 2007, Souls from 2010 to 2011 and Optimas from 2011.

The stop-lamp defect can also lead to intermittent operation of the push-button start, prevent the gear shifter from being moved out of the park position, or cause the electronic stability control malfunction light to illuminate, according to the NHTSA filings.

The vehicles included in the latest recall were built after a previous Hyundai recall for stop-lamp switch replacement, the company said in a March 29 letter to NHTSA. The company, in the letter, told regulators it changed its production process since the 2009 recall and that the cars and trucks in the new recall were manufactured before all the changes were made.

Canada Probe
A Transport Canada investigation led to the new recall following a November notification that it had received nine complaints about stop-lamp switch replacement for vehicles not included in the first recall.
In an unrelated notice posted, Hyundai said it recalled 186,254 Elantras from the 2011 to 2013 model years. Support brackets attached to the lining along the top of a car’s interior can detach when a side-curtain air bag deploys, it said.
Shares of Hyundai have fallen 4.1 percent this year, while Kia has lost 5.5 percent. The Kospi index has slipped 1.6 percent

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