Drop in shares
20 March, 2018, 12:00 am
SEOUL – Shares of Hyundai Motor slid on Monday after a US regulator said it had opened a probe into why some air bags failed to deploy in Hyundai and Kia vehicles following crashes that reportedly killed four people and left six injured.
This is the second investigation by the US National Highway Traffic Safety Administration into the South Korean duo in less than one year, and comes as the automakers grapple with weak sales in the United States.
The agency said it was reviewing the 2012-2013 Kia Forte and 2011 Hyundai Sonata models, encompassing about 425,000 vehicles.
Hyundai Motor Co issued a recall last month for more than 150,000 US Sonatas after non-deployment reports were linked to electrical overstress in the air bag control unit, but said it did not have a final fix yet.
A spokeswoman for Hyundai and Kia declined to comment on whether the recall will be expanded, saying the automakers were cooperating with the investigation.
Shares in Hyundai Motor shares tumbled 4 per cent while Kia Motors lost 2.8 per cent and Hyundai Mobis, a maker of airbags, slid 5.4 per cent.
The agency said the air bag control module was built by ZF Friedrichshafen-TRW, a German auto supplier that acquired TRW Automotive Holdings Corp in 2015.
In May, NHTSA opened a formal investigation into the recall of nearly 1.7 million vehicles by Hyundai and Kia over engine defects.
In 2016, a South Korean whistleblower reported concerns that defects were concealed and that recalls were not issued in a timely manner to the NHTSA.