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Hyundai Motor's recall of its flagship Sonata sedan in the U.S. has triggered fears of eroding quality at Korea's largest carmaker. The U.S. National Highway Traffic Safety Administration said on Sunday that 139,500 Sonatas of model year 2011 manufactured at Hyundai's Alabama plant between Dec. 11, 2009 and Sept. 10, 2010 would be recalled. The recall affects nearly every Sonata sold in the U.S. during that period.

◆ Handful of Complaints Lead to Massive Recall

The NHTSA began investigating in August all Hyundai and Kia vehicles sold in the U.S. following two consumer complaints over the Sonata and one regarding the Kia Soul, all involving steering issues. Although the number of complaints was low, the agency opened the probe due to concerns that the problems could potentially result in serious accidents.

According to Hyundai-Kia Automotive Group, a defect was found in some Soul cars in bolt connections that hold the power steering system together. A complaint about the Sonata stemmed from noise and vibration due to a faulty connection in the power steering system, while another issue was that the steering system separated because of poor assembly. Both problems were due to faulty assembly.

"Less than 10 cars were affected by the defects, and no accidents have occurred as a result of them," a Hyundai spokesman said. "We will proceed swiftly with the recall in October."

Since the recall does not involve accidents or structural defects, it is not expected to deal a heavy blow to Hyundai. But Lee Sung-shin, head of BMR Consulting, said, "It's possible that Hyundai's brand image of dependable quality at a reasonable price could take a hit to some extent."

◆ Rapid Expansion Can Cause Quality Deterioration

The recall could worsen if more quality issues emerge. Problems with the door-lock mechanism surfaced when the revamped Sonata first hit U.S. showrooms in February, but a quick recall of affected models prevented the issue from escalating. But the latest recall involves a much larger number of vehicles, sparking more concerns over quality.

Hyundai-Kia subcontractors say the carmaker's quality control process has been stretched to its limit by a rapid increase in output. "We are working through the night as orders for new vehicles have risen between 50 to 100 percent compared to targets set at the beginning of the year," an source at a subcontractor said.

Despite the global economic slump, Hyundai-Kia's sales rose from 4.18 million vehicles in 2008 to 4.64 million last year. Sales this year are expected to surpass the company's projection of 5.4 million vehicles, resulting in a record 9.3 percent global market share. Sales in Korea, the U.S. and China are also forecast to hit all-time highs this month.

Experts say Hyundai-Kia should heed Toyota's mistake of expanding too quickly. The Japanese carmaker began a rapid expansion strategy in 2000 to boost its global market share to 15 percent by accounting for 10 million of the 70 million cars sold worldwide per year. But over the past year it has recalled more than 8 million vehicles worldwide over defects such as pedals that stuck or snagged on floor mats.

"Rapid increases in production can eventually lead to problems in maintaining quality," said Kim Ki-chan, professor of automotive industry economics at the Catholic University of Korea. "If quality deteriorates, Hyundai could have a serious crisis on its hands."

 

 

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