Hyundai Motor, Kia Motors agree to settle U.S. engine defect lawsuits

SEOUL (Reuters) – South Korea’s Hyundai Motor Co (KS:) and affiliate Kia Motors Corp (KS:) on Friday said they have agreed to resolve class action litigation with U.S. owners of certain vehicles over engine fire risks.

The settlement provides cash compensation options, lifetime warranties, free inspection and repair of the covered engines, as well as installation of a software update to boost safety and performance, the automakers said in a statement.

They said they expect the U.S. District Court for the Central District of California to review the proposed settlement for preliminary approval before the end of October.

Hyundai and Kia, together the world’s fifth-biggest automaker by sales, recalled nearly 1.7 million vehicles in 2015 and 2017 in the United States to address engine defects. In November, Reuters reported that U.S. federal prosecutors had launched a criminal investigation into the pair to determine if the recalls had been conducted properly.

The U.S. safety regulator is also investigating whether the recalls covered enough vehicles and were conducted in a timely manner.

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