Hyundai Motor, Kia Motors flag $2.9 billion earnings hit from quality costs

Ghana Waves App

Hyundai Motor 005380.KS and affiliate Kia Motors 000270.KS said on Monday that their third-quarter earnings would reflect quality-related costs amounting to a combined 3.36 trillion won ($2.94 billion).

The costs would include additional provision expenses related to the South Korean car makers’ “Theta” engines, the companies said in separate regulatory filings.

Hyundai Motor said a cost of 2.1 trillion won will be reflected in its earnings, while Kia Motors flagged an earnings hit of 1.26 trillion won. They did not provide further details.

U.S. safety regulators in 2017 launched an investigation into the recall of nearly 1.7 million vehicles by Hyundai Motor Co and affiliate Kia Motor Corp over an engine defect that increases the risk of a crash.

A South Korean whistleblower, who was a former quality official at Hyundai, reported concerns in 2016 to the U.S. National Highway Traffic Safety Administration (NHTSA), which has started probing whether their recalls covered enough vehicles and were conducted in a timely manner.

Hyundai was being investigated by U.S. prosecutors over whether vehicle recalls were conducted properly, Reuters reported in 2018.

Source: Reuters

Related posts

National Tripartite Committee begins processes to set new minimum wage

Ghana Waves App News

BoG announces sanctions for dud cheque issuers

Ghana Waves App

Over 900,000 Workers’ Data Merged On SSNIT, NIA Card

Ghana Waves