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U.S. Senate panel wants to question Hyundai, Kia over engine fire reports

Stock Markets Oct 17, 2018 10:43PM ET
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By David Shepardson

WASHINGTON (Reuters) - The Senate Commerce Committee's Republican chairman and ranking Democrat said on Wednesday they had asked top U.S. executives at Hyundai Motor Co (KS:005380) and Kia Motors Corp (KS:000270) to testify at a Nov. 14 hearing on reports of engine fires involving vehicles from the Korean automakers.

The call to testify comes after safety advocates raised concerns about fires in vehicles not involved in collisions. The non-profit, consumer advocacy group Center for Auto Safety said last week that 103 fire complaints had been filed with U.S. safety regulators since June 12 and urged an immediate recall of nearly 3 million vehicles.

Hyundai said in a statement it had received the request to appear "and is currently reviewing it." The company added it "actively monitors and evaluates potential safety concerns, including non-collision fires, with all of its vehicles and acts swiftly to recall any vehicles with safety-related defects."

Kia did not comment.

Shares of Hyundai Motor fell as much as 3.8 percent in Seoul trading on Thursday. Kia Motors stock also slid 3.7 percent, while the wider market (KS11) was down 0.6 percent as of 0232 GMT.

In May 2017, the National Highway Traffic Safety Administration (NHTSA), an agency of the U.S. Department of Transportation, opened a formal investigation into the recall of nearly 1.7 million Hyundai and Kia vehicles over engine defects.

A South Korean whistleblower in 2016 reported concerns to NHTSA, which has been probing the timeliness of three recalls carried out in the United States and whether they covered enough vehicles.

Senator Bill Nelson, the top Democrat on the Commerce Committee, said a non-collision fire death had been reported last year in a 2014 Kia Soul. "We’ve got to get to the bottom of what's causing these fires," Nelson said in a statement Wednesday. "Car owners need to know if their vehicles are safe."

The letter to the automakers also signed by Senator John Thune, who chairs the committee, said the hearing will also "examine efforts to mitigate vehicle fires and promptly identify and respond to defects that may pose a fire risk" and invites the chief executives of Hyundai and Kia's U.S. units to testify or their designee.

In 2015, Hyundai recalled 470,000 U.S. Sonata sedans, saying engine failure would result in a vehicle stall, increasing the risk of a crash. At that time, affiliate Kia did not recall its vehicles, which share the same "Theta II" engines.

In March 2017, Hyundai expanded its original U.S. recall to 572,000 Sonata and Santa Fe Sport vehicles with "Theta II" engines, citing the same issue involving manufacturing debris, NHTSA said.

On the same day, Kia also recalled 618,160 Optima, Sorento and Sportage vehicles - all of which use the same engine.

The recall, which was also conducted in Canada and South Korea, cost the automakers an estimated 360 billion won ($319.30 million).

The Center for Auto Safety filed a petition in June seeking a defect investigation over engine fires in 2011-2014 Kia Optima and Sorento vehicles and Hyundai Sonata and Santa Fe vehicles from the same model years.

In response, NHTSA said in August that the majority of the fires cited in the petition "appear to be related to the engine failures" covered by the investigations announced in May 2017.

NHTSA said Wednesday the petition remains under consideration, but did not comment on the hearing.

U.S. Senate panel wants to question Hyundai, Kia over engine fire reports
 

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