Hyundai, Kia Plan major car rcall in U.S. and S.Korea
The recall, which could cost the two firms hundreds of millions of dollar each, comes as Hyundai and Kia face a sharp drop in China sales and sluggish demand in the United States and South Korea.
The two car companies said on Friday they will recall 171,348 vehicles in South Korea because of a manufacturing problem, which leads to possible engine stalling.
The South Korean automakers have also submitted plans to U.S. authorities to recall an unidentified number of vehicles in the United States over a “similar” engine issue, a spokesperson at the South Korean duo said.
Yonhap News Agency, citing Hyundai, said the U.S. recall would reach some 1.3 million vehicles, an amount close to the duo’s annual U.S. sales.
The U.S. recall alone could cost the companies as much as 250 billion won ($220.19 million) each, hitting earnings, said Koh Tae-bong, an analyst at Hi Investment & Securities.
A Hyundai official declined to confirm to Reuters the expected cost of the U.S. recall, nor the number of vehicles involved.
The recall helped push Hyundai Motor shares lower by as much as 2.7 percent, compared to a 0.4 percent decline in the broader market .KS11. Kia Motors were down 1.1 percent.
