Hyundai and Kia are still in trouble over engine issues.
The companies said they would set aside a combined 2.9 trillion won ($2 billion) in their third-quarter earnings as provisions for the engine problems.
Hyundai and Kia are still in trouble over engine issues. The companies said they would set aside a combined 2.9 trillion won ($2 billion) in their third-quarter earnings as provisions for the engine problems. This represents 44% and 66% of their estimated operating profits for the quarter, respectively.
Hyundai had its first issues with the THETA engine going as far back as 2011. The engine type was used in 1 million vehicles. Hyundai issued a recall and set aside 3.36 trillion won in 2020 as part of a class-action lawsuit settlement with American drivers. Kia, which also used the same engine in many of its popular models starting in 2011, has had to recall hundreds of thousands of vehicles due to engine fires.
The two companies have been struggling to regain consumer trust after a series of recalls and engine fires, not to mention a very publicized battery fire problem with many of their first EVs. Hyundai has tried to improve its image by introducing new models and investing in electric vehicles, but it has not been able to shake off its reputation for various quality issues. Kia, on the other hand, has been working on its quality control and has had fewer issues in recent years. However, the engine fires have dealt a major blow to its reputation.
After the stock market closed in Seoul, the companies released filings stating they would set aside the costs to improve vehicle quality and safety. A Hyundai statement posted Tuesday, as reported by Bloomberg, said the issue affects 2.4 million Hyundais and 1.8 million Kias.