Hyundai Motor Co. vehicles are on display 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 “public nuisance,” according to a lawsuit filed in Manhattan federal court.
New York City is accusing the two companies of failing to install anti-theft devices after a social media challenge prompted young teens to steal vehicles off the street by hitting them with a USB cable shorted out.
A viral TikTok challenge started in 2021 and led to a spike in Hyundai and Kia car thefts. Chicago saw an 800% year-over-year increase in thefts of these cars in August 2022, officials told CNBC at the time. Los Angeles officials also saw an 85% increase year-over-year.
“By putting profit before safety and deviating from industry norms by not including immobilizers as a standard safety feature, the defendants have created and perpetuated a public nuisance,” said the City of U.S. District Court in the Southern District of New York filed.
New York accused the two companies of enabling “this growing epidemic” of auto theft.
“This case is a clear example of the public safety implications when automakers choose not to equip their cars with standard anti-theft technology,” the filing reads. “Ensuring cars are not easily stolen protects both property and the public by keeping dangerous drivers off the road in stolen vehicles,” it said.
In response, Hyundai said it made immobilizers standard in all vehicles from November 2021 and took steps to reduce the risk of theft. It also said it communicates with the National Highway Traffic Safety Administration to support its customers.
Kia added that the company is working with law enforcement to fight “car theft and the role social media has played in promoting it” and that it is “committed to supporting our customers and vehicle safety.”
The complaint highlighted the companies’ “failure” to install anti-theft devices and accused them of “opening the floodgates to vehicle theft, crime, reckless driving and public harm”.
Shares in South Korea’s largest automaker fell on Wednesday. Hyundai Motors fell more than 2%, while Kia Corp declined more than 5%.
According to Reuters, Hyundai and Kia last month agreed to settle a $200 million consumer class action lawsuit that affected some 9 million car owners and included up to $145 million for out-of-pocket losses suffered by customers.
“Quadruple Blast” of thefts
The City of New York said in its filing that the thefts are still ongoing and that it is seeking “compensation for the economic losses,” without giving an exact figure.
“2023 saw an explosion in the number of Kia and Hyundai thefts compared to previous years,” it said. According to the information, around 977 Hyundai and Kia vehicles were reported stolen in the first four months of the year.
“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 Baltimore, St. Louis, Milwaukee, San Diego and Seattle.
In a May press release, Baltimore Mayor Brandon M. Scott said, “These austerity measures by Hyundai and Kia at the expense of public safety are unacceptable.”