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CEOs at Hyundai, Kia pledge cooperation with U.S. over rash of fires

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Kia CEO Han-woo Park: “The first step is fact finding.”

UPDATED: 10/24/18 9:54 am ET – adds detail

SEOUL — The global bosses at Hyundai and Kia are still weighing a congressional call to have their top U.S. executives testify about a rash of reported noncollision fires in their vehicles as they work with regulators to address safety concerns.

In separate interviews Thursday at the South Korean carmakers’ headquarters here, Wonhee Lee, CEO of Hyundai Motor Co., and Han-woo Park, CEO of Kia Motors Corp., said their companies are considering how to best respond to the request they talk before lawmakers in Washington.

In the meantime, they said, Hyundai and Kia are coordinating with NHTSA, the nation’s top auto safety regulator, to ensure safety and to identify root causes of the reported fires.

“We are in the process of responding to this recent inquiry regarding vehicle fires,” Kia’s Park said. “The technical finding is the first. The first step is fact finding.”

Hyundai’s Lee said the matter is a top priority and added that Hyundai and Kia rank below average in the number of noncollision fires reported in the U.S. market.

“We have to handle that issue very seriously,” Lee said.

“But ironically, Hyundai and Kia, statistically in the U.S. market, are not the companies ranked at the top of vehicle noncollission fires,” he said. “Actually, we are almost at the bottom.”

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Hyundai said that although complaints have spiked recently, rates of noncollision fire cases involving its vehicles are below the industry average over the long term.

Hyundai CEO Wonhee Lee: “We have to handle that issue very seriously.”

Early lessons

Hyundai knows all too well how lapses can tarnish a company’s reputation.

The brand landed stateside in the 1980s with a zooming start. But shoddy quality soon turned off buyers, and sales cratered. It took Hyundai some 15 years to rebuild its reputation, Lee said.

“We learned a lesson from that history,” Lee said. “After that, quality is the No. 1 issue in producing and developing our product.”

The South Korean stablemates are again facing unflattering headlines amid a potential crisis surrounding hundreds of reports of noncollision fires in their vehicles.

The Center for Auto Safety has asked the carmakers to recall almost 3 million crossovers and sedans to address the risk of potential fires that could erupt while people are driving.

Congressional action

Congress weighed into the matter last week, urging the local CEOs of Hyundai and Kia to appear Nov. 14 before the Senate Commerce Committee, the same panel that grilled Mary Barra over faulty ignition switches just weeks into her tenure as CEO of General Motors.

The Center for Auto Safety wants recalls of all 2011-14 Kia Sorento, Kia Optima, Hyundai Sonata and Hyundai Santa Fe models, as well as all 2010-15 Kia Souls.

The exposure comes at a sensitive time for Hyundai and Kia, which are poised for a long-awaited infusion of new and updated crossovers. Both brands are also in peak marketing mode with highly visible sponsorships of the NFL and NBA.

Kia’s Park said that even if brand image takes a hit from the fire flareup, the company can shore up trust by doing its utmost to address customer concerns.

“Kia is also working cooperatively to provide NHTSA with data regarding the safety performance of all Kia vehicles, including concerns about vehicle fires, and is committed to providing this relevant information in a timely manner to use this information to develop a data-driven analysis of Kia vehicle safety,” Park said.

“Our first priority is customer satisfaction. Through that, we will continuously increase our brand image.”

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