Thursday, April 11, 2013

Hyundai Recall Latest Problem for Company

Hyundai said recently it is recalling nearly 1.9 million cars in the United States in response to a defective brake light switch and also suggested that it would globally address the problem, which could lead to an even higher number of vehicles for the recall.

The recall follows the company's recent admission that it overinflated the fuel economy numbers of some of its vehicles, possibly suggesting that the company is cutting corners in its quest to boost worldwide sales, experts said.
"Hyundai has built factories very fast around the globe until recent years, but its quality improvement has failed to keep up with its rapid volume growth," Kim Phill-soo, a professor at Daelim University College in Seoul, told Reuters.

"The latest recall highlighted loopholes in Hyundai's quality system."

John Tavius, a sales analyst with DriveTime in Atlanta, said the back-to-back damaging issues could leave Hyundai with a black eye.

"When people start turning away from a brand, sales can drop rapidly," he said, while adding that Hyundai had worked hard to overcome its previous reputation for substandard quality and that those efforts could be damaged.
An executive with a rival Asian automotive company said this his organization now views Hyundai as being vulnerable, not only because of the fuel economy fraud and recall, but also because of higher prices on its vehicles.
"We're looking at some real potential for sales gains at their expense," said the executive, who requested anonymity.
Hyundai dropped to 18th in a key quality survey by J.D. Power and Associates last year, from 11th in 2011.

Some of the company's newer vehicles have not performed as well as some models from past years, Dave Sargent, a vice president at J.D. Power, told Reuters.

Hyundai said it will conduct a recall, service campaign or other remedial actions in all countries where vehicles equipped with the faulty stop lamp switch have been sold.

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