This file photo provided by Hyundai Motor Group shows Hyundai Motor and Kia’s headquarters buildings in Yangjae, southern Seoul.
SEOUL, Oct. 18 (Korea Bizwire) — Hyundai Motor Co. and its affiliate Kia Corp. said Tuesday they reflected 2.9 trillion won (US$2 billion) worth of provisions in their third-quarter earnings results, a move that could weigh on their September quarter bottom lines.
Hyundai and Kia put aside the provisions — 1.36 trillion won and 1.54 trillion won, respectively — to resolve additional complaints involving the Theta II gasoline direct injection (GDi) engine and offer other customer services, the companies said in separate regulatory filings.
“The companies have decided to take a preemptive and thorough response to maintain their product quality amid an increasing demand for engine replacements and the won’s weakness against the dollar (that drives up replacement costs in the U.S.),” Hyundai Motor Group said in a statement.
The dollar rose to an average of 1,337.98 won in the third quarter from 1,157.35 won a year earlier, according to the Bank of Korea.
Hyundai and Kia plan to release their quarterly figures on Oct. 24 and 25, respectively.
In 2019, Hyundai Motor Group reached a settlement with car owners over the Theta II GDi engine for problems, such as engine stalling and non-collision fires, in the United States.
In the third quarter of 2020, Hyundai and Kia reflected a combined 3.39 trillion won worth of provisions in their financial results.
(Yonhap)
