Hyundai shares are in the midst of a steep sell-off following news of an expanded probe into their airbags.
Earlier this month, Hyundai issued a recall on 2011 model year Sonatas after it was determined that their airbags could be faulty. The electrical control unit which causes the airbags to deploy could short out in a head-on collision, causing both front and side airbags to fail to deploy as well as preventing the passenger’s seat belt from tightening.
Hyundai said they were aware of four incidents where 2011 Sonatas did not deploy airbags in a crash, resulting in four dead and six injured.
The recall affects some 154,753 Sonata models built between December 11th, 2009, and September 29th, 2010, at Hyundai's Alabama assembly plant.
Now the National Highway Traffic Safety Administration (NHTSA) is expanding their probe to include Hyundai’s sister company, Kia. The government body will now look at 425,000 2012-2013 Kia Fortes to determine if they too might suffer from a similar fault that causes their airbags to fail to deploy in a crash.
Although the market for four-door sedans and two-door coupes has fallen drastically over the last several years, they’re still important market segments for Hyundai. Analysts predict a cost of $575 million to recall all potentially affected Fortes and replace their airbags with upgraded control units.
Kia denies the possibility of a problem with their airbags, but will "act promptly to conduct a safety recall, if [NHTSA] determines that a recall would be appropriate."
Hyundai shares lost 4.8 percent by early Monday trading, while Kia shares lost 3.7 percent.
The NHTSA also confirmed that a similar issue, whereby the electrical control units governing airbag deployment suffer electrical fatigue to the point of short-circuiting, also affected Fiat Chrysler resulting in the 1.4 million vehicle recall in 2016. That recall was enormously costly as it affected nearly a dozen cars in the Fiat Chrysler lineup.