Hyundai & Kia to recall 240,000 faulty vehicles

Hyundai (KRX:005389) and its affiliate Kia (KRX:000270) said on Friday they were ordered to recall 240,000 of their vehicles after a whistleblower raised safety issues with the cars.

It is the first time the South Korean government have ordered a compulsory vehicle recall due to the flaws flagged up on 12 different vehicles. The transport ministry will also investigate into whether there was any sign of cover-up in the companies.

Hyundai and Kia initially rejected the recall, saying that the defects did not affect safety. The models affected include the Hyundai’s Sonata midsize sedan, the i30 hatchback and, the luxury Genesis. Kia vehicles affected are the Mohave and the Carnival minivan.

Defects include issues with parking brake lights and fuel hoses.

Hyundai and Kia have now accepted the government’s recall order.

“Safety is always Hyundai/Kia’s number one priority and we make decisions on recalls or any other customer protection steps in compliance with regulators around the world and stringent internal procedures”

“There have been no reported injuries or accidents from the cited issues,” they added.

The recall is a blow to the both Hyundai and Kia. Last month they said that would recall 1.5 million vehicles over possible engine stalling in South Korea and the US. This was also brought to light by a whistleblower.

The transport ministry asked the automakers to recall the faulty vehicles over eight of the 32 issues identified while offering free repairs on nine of the faults.

Kim Gwang-ho, the whistleblower in this case, told the BBC last month that while whistleblowers in South Korean firms are rare, he exposed what was happening in the firm because he could not allow passengers to travel in faulty vehicles.

Earlier this month, Hyundai dropped the lawsuit against him and reinstated him to his old job.

Kia Motor shares were down 1 percent and Hyundai shares declined 0.5 percent as of 0430 GMT.