Carmakers Hyundai, Kia warn of US$2.9 billion hit to earnings over US quality woes

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SEOUL: Hyundai Motor and affiliate Kia Motors warned of another US$2.94 billion (RM12.2 billion) of provisions related to engine issues, bringing thei...

Hyundai Motor and affiliate Kia Motors warned of another US$2.94 billion of provisions related to engine issues, bringing their total hit from the years-long quality problem that has tarnished their credibility to nearly US$5 billion.

Hyundai and Kia, together the world's No. 5 automaker, recalled nearly 1.7 million vehicles in 2015 and 2017 in one of their biggest recalls in the United States, citing an engine failure that raises the risk of crashes. Hyundai was being investigated by US prosecutors over whether vehicle recalls were conducted properly, Reuters reported in 2018.

The latest provisions reflect higher-than-expected replacement rates for Theta II GDI engines of old vehicles subject to recalls, as well as growing consumer complaints over the same engine and other engines not subject to recalls, Hyundai said.

 

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