Hyundai, Kia warns of $2.9 billion hit to revenues over U.S. quality woes

Hyundai Motor and affiliate Kia Motors have warned of another $2.9 billion of provisions associated with engine issues, bringing their total hit from the years-long quality problem that has tarnished their credibility to almost $5 billion.

Hyundai Motor said on Monday their third-quarter revenues would reflect quality-related costs of a combined 3.36 trillion won ($2.94 billion), of which Hyundai totaled 2.1 trillion and Kia for 1.26 trillion.

Hyundai and Kia, together with the world’s No.5 automaker, recalled almost 1.7 million vehicles in 2015 and 2017 in one of their biggest recalls in the United States, due to an engine failure that raises the risk of crashes.

In 2017, U.S. safety regulators started to investigate if the recalls had covered enough vehicles and were completed in a timely fashion. That followed concerns reported by a South Korean whistleblower, a former quality official at Hyundai, to the U.S. National Highway Traffic Safety Administration (NHTSA).