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NHTSA opens probe into 3 million Kia, Hyundai vehicles for fire risks

The National Highway Traffic Safety Administration said on Monday it would open a new safety defect investigation into three million Hyundai and Kia vehicles for fires not caused by crashes. The investigation is in response to a petition seeking a probe by the Center for Auto Safety. The auto safety agency since 2007 has been investigating some Hyundai and Kia vehicles for fire risks. The South Korean automakers have recalled more than 2.3 million vehicles since 2015 to address various engine fire risks. Hyundai did not immediately comment, while Kia did not immediately respond to a request for comment. NHTSA said the decision to initiate the additional safety defect probe was based on its analysis of information received from multiple manufacturers, consumer complaints and other sources. Last month, Connecticut Attorney General William Tong said a group of U.S. states is investigating Hyundai and Kia for potential unfair and deceptive acts related to reports of hundreds of vehicle fires. In November, Reuters reported that federal prosecutors had launched a criminal investigation into Hyundai and Kia to determine if vehicle recalls linked to engine defects had been conducted properly. Reuters reported in January that the companies would offer software upgrades for 3.7 million vehicles not being recalled. A South Korean whistleblower in 2016 reported concerns to NHTSA, which has been probing the timeliness of three U.S. recalls and whether they covered enough vehicles. 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 the time, 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 those Theta II engines, citing the same issue involving manufacturing debris. On the same day, Kia also recalled 618,000 Optima, Sorento and Sportage vehicles, all of which use the same engine.Reporting by David Shepardson.

Hyundai Palisade and Genesis GV80 production idled

In February of this year, the coronavirus pandemic forced Hyundai Motor Company to idle production at most of its factories in South Korea. The Chinese suppliers that provided wiring harnesses for models like the Hyundai Palisade and Genesis GV80 hadn't recovered from their COVID-19 shutdowns, causing a shortage of components. Since then, Hyundai, along with automakers around the globe, has faced repeated hurdles to restoring desired production numbers. Just-Auto reports another hiccup, with Hyundai compelled to shut down lines that build the Palisade and GV80 at its Ulsan, South Korea complex again last week over a lack of parts. Just-Auto didn't specify the parts in question. On top of that, Hyundai had already idled three lines at two plants after an employee at a supplier died, the cause of death thought to be COVID-19. Kia needed to do the same for two entire facilities in South Korea after two plant workers were diagnosed with the illness. In the U.S., Hyundai Motor Manufacturing Alabama was idled from March 18 to May 4, resuming production at lower output on May 4 to manage inventory after the coronavirus and lockdown measures gutted new car sales.   Hyundai, like giant Ford and tiny McLaren, will be ruing the lost momentum of its recovery. The group turned in its best quarterly profit since 2017 at the end of last year, thanks to the larger margins that crossovers and SUVs deliver. Hyundai brand U.S. sales last year of 688,771 units was tantalizing close to an annual sum the brand hasn't hit since 2012. In January, the automaker predicted it would improve on last year's 3.5% group operating profit margin by hitting 5% this year. The nearly 10,000 reservations taken for the GV80 fueled the optimism, when Genesis sold just over 21,000 vehicles in total last year in the U.S. However, through the first quarter, group sales were down 11% globally and in the U.S. Worse, Just-Auto says the group's global sales have nosedived 26% through the first five months. The production halts on the models that deliver the best return will prolong the pain and make it sharper. Related Video:

Why Kia doesn't need a premium brand

Hyundai's creation of the Genesis luxury brand means it and fellow Korean brand Kia have finally hit the mainstream in the U.S. – as far as products are concerned – after nearly three decades of trying. Which is about as long as it took Toyota and Nissan to roll out Lexus and Infiniti, respectively. It's history repeating itself. Genesis is supposed to be the way Hyundai's premium models get the respect they deserve, without carrying the baggage of a name associated with frugality. Hyundai has, in fact, built up a reputation over the last decade or so for cars that compete head-on with class leaders, rather than aim to be 90 percent as good for 75 percent of the price. And because Kia shares a number of components with Hyundai, its vehicles have also steadily become not only better mainstream vehicles, but have continued to aim higher than their price points. Does Kia need to follow now in its parent's steps with a prestige brand to market its most expensive models? I'm aware of the Kia K900, the company's deepest foray into luxury territory notably occupied by Lexus. Kia, however, has consistently been pushing this $60,000 full-size luxury sedan along with $0 down, low monthly payment lease deals. Turns out there really aren't many people looking for a full-size Kia luxury sedan. Or maybe they're just waiting to get it for $20,000 in a couple of years. Consider the K900 and Genesis when I convince you Kia already makes upscale cars to rival those with premium badges. They just don't happen to be its most expensive model. Shortly after Hyundai's announcement it would spin its luxury models off into the Genesis brand, I spent a few days with a 2016 Kia Sorento SXL. And I'm willing to call it a more convincing attempt to get people out of luxury cars than the K900. Driving the Sorento is not an emotional experience. You feel parental driving it, thinking you might've forgotten to pick your kids up until you remember you don't actually have kids. But after settling into the nicely stitched and perforated leather seats, you respect its comfort, quiet and amenities. The headliner is soft, the stitching on the dash top is convincingly real and everyone is impressed by the sharp graphics on the touchscreen and the slick powered shade that reveals an expansive glass roof. A Kia Sorento costing more than $46,000 sounds absurd until you wonder how much better an Acura MDX or Lexus RX350 is when those cost as much as $10,000 more.