NHTSA Fines Hyundai $17 Million for Late Defect Report

Hyundai Motor Co. has agreed to pay a fine of $17 million for failing to promptly report a brake system corrosion problem in 43,500 of its 2009-2012 model Genesis large sedans.

A supplier discovered in 2012 that brake fluid being used in the affected cars failed to sufficiently inhibit corrosion in the brake system's hydraulic electronic control unit. If untreated, the vehicle's braking ability would decline.

Hyundai issued a service bulletin in March 2013 that urged dealers to replace the brake fluid in affected cars. But the company didn't say why the action was needed or the consequences of not replacing the fluid. Hyundai issued a recall seven months later after the National Highway Traffic Safety Administration launched an investigation into the problem.

NHTSA notes that General Motors Co. responded quickly to resolve the same problem with the same component in its own vehicles. GM launched recalls in 67 countries in January and September 2012. The company also issued a service bulletin in the U.S. that explained why a different brake fluid was needed.

Under the consent order Hyundai has created a U.S.-based technical committee with authority to decide on future recalls without approval of corporate headquarters in South Korea. The committee will have direct access to Hyundai's board and the CEO of the company's U.S. operating unit.

Hyundai further agreed not to delay the committee's meetings or decisions if the company cannot immediately identify the cause or cure of a problem. It also will alert NHTSA about recalls it conducts outside the U.S. on vehicles similar to those sold in America.