Global Courant
Vehicles from Hyundai Motor Co. will be displayed at the company’s Motorstudio showroom in Goyang, South Korea, on Thursday, October 22, 2020.
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South Korean automakers Hyundai and Kia are being sued for causing “public nuisance,” according to a complaint filed in Manhattan federal court.
New York City is accusing the two firms of failing to install devices that prevent cars from being stolen after a social media challenge prompted young teens to steal vehicles off the street by wiring them with a USB cable.
A viral TikTok challenge started in 2021 and led to an increase in thefts of Hyundai and Kia cars. Chicago saw an 800% year-over-year increase in the theft of these cars for the month of August 2022, officials told CNBC at the time. Los Angeles officials also saw an 85% increase over the previous year.
“By choosing profit over safety and deviating from industry standards by not including immobilizers as a standard safety feature, defendants created and enforced public nuisance,” the city said in its filing filed in U.S. District Court in the Southern District of New York. .
New York accused the two companies of enabling “this spiraling epidemic” of car thefts.
“This case is a clear example of what happens to public safety when automakers choose not to include standard anti-theft technology in their cars,” the filing said. “Making sure cars are not easy to steal protects both property and the public by keeping dangerous drivers off the road in stolen vehicles,” it said.
When reached out to CNBC, Hyundai stressed a response was sent to news outlets where it said it had made immobilizers standard on all vehicles from November 2021 and had measures in place to reduce the threat of theft.
The indictment highlighted the companies’ “failure” to install an anti-theft device and accused them of “opening the floodgates to vehicle theft, felony assault, reckless driving and public harm.”
Shares of South Korea’s largest automakers fell on Wednesday. Hyundai Motors was down more than 2%, while Kia Corp was down more than 5%.
According to Reuters, Hyundai and Kia last month agreed on a $200 million consumer settlement in a class action lawsuit, involving about 9 million car owners and up to $145 million in cash losses for customers.
‘Virtual explosion’ of thefts
New York City said in its filing that the thefts are still ongoing and it is seeking “compensation for the economic losses,” without specifying an exact figure.
“In 2023, compared to previous years, there has been a virtual explosion of thefts of Kias and Hyundais,” it said. About 977 Hyundai and Kia vehicles were reported stolen in the first four months of the year, according to the filing.
“This represents an approximately 660% increase in thefts of Kia and Hyundai vehicles compared to the same months in 2022, when there were only 148 such thefts,” it said.
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New York City joins a number of cities that have taken similar action against the two automakers, including BaltimoreSt Louis, Milwaukee, San Diego and Seattle.
In a press release, Baltimore Mayor Brandon M. Scott said in May, “These cost-cutting measures by Hyundai and Kia at the expense of public safety are unacceptable.”
