QUOTE ("Market News: Consumer Cycles")
UPDATE 3-U.S. regulators probe Hyundai Sonata steering
08/31/2010 02:54 PM EDT
Copyright 2010 Reuters
* Shaft allegedly decoupled, leading to steering loss
* Similar NHTSA probe into Kia Soul began last month
* No recall, preliminary investigation has begun
* Sonatas involved were built in the same month-NHTSA (Adds Canadian Sonata sales)
By Bernie Woodall
DETROIT, Aug 31 (Reuters) - U.S. safety regulators have opened a preliminary investigation into claims Hyundai Motor Co's <005380.KS> best-selling car in America, the Sonata sedan, may have steering problems, government officials said on Tuesday.
There have been no injuries or accidents reported to the National Highway Traffic Safety Administration or Hyundai regarding the steering issue, NHTSA and company officials said.
Steering could be a problem on 16,300 Sonata sedans that were built in the same month at Hyundai's plant in Alabama, according to the NHTSA, which also said Sonatas cited in its reports each had fewer than 600 miles driven on them.
NHTSA said it will investigate to verify consumer complaints that "the steering shaft allegedly decoupled from the hand wheel resulting in a complete loss of steering capability."
NHTSA opened the investigation for the Sonatas last Friday, a day after it began a preliminary investigation into an estimated 37,889 model-year 2009 Volkswagen Jetta TDIs that may have engine stalling problems. NHTSA said it received seven complaints on the engine problems.
On Aug. 23, after receiving 217 consumer complaints, NHTSA opened a probe regarding possible fuel spills during refueling on as many as 223,000 Chrysler Jeep Wranglers from model years 2007 and 2008.
No crashes or injuries have been reported to NHTSA regarding the Wrangler or the Jetta issues.
Hyundai spokesman Jim Trainor said two Sonata customers brought their sedans to Hyundai dealerships complaining of steering problems. Those cars were fixed and returned to the owners.
The Sonata is a key to Hyundai's success in the U.S. market, and the South Korean automaker is advertising it as an alternative to the more expensive Japanese sedans of similar size.
Through July, the 108,000 Sonata sedans sold accounted for 46 percent of Hyundai's U.S. car segment sales this year. About 8,000 more were sold in Canada, Hyundai said.
The Sonatas for the U.S. and Canadian markets are built at a Hyundai plant in Alabama. Sonatas sold outside those markets are built in South Korea.
Last month, a similar preliminary investigation was opened by NHTSA for the Kia Soul after a driver complained of a total loss of steering and limited braking in a car that was two months old and had about 4,300 miles driven on it.
Hyundai's Trainor said the Soul and the Sonata issues are unrelated and it has not been determined if steering issues on either model are related to supplier parts.
Hyundai's sister company, Kia, builds the Soul in South Korea.
The Soul is the rival to the Toyota Motor Corp <7203.T> Scion brand targeted at younger drivers.
Hyundai's U.S. sales are up 23 percent from last year through July, and U.S. sales for the Sonata were nearly 18,000, according to Autodata. In 2009, while the overall U.S. auto industry suffered a 21 percent drop in sales, Hyundai was the only major automaker to increase sales and market share.
Kia's share of the U.S. market so far this year is 3.1 percent.
In 2008, Hyundai sales accounted for 3 percent of the U.S. market. Through July this year, its market share is 4.6 percent.
Kia sales through July were up 16 percent, outperforming the U.S. overall market's 14 percent gain. (Reporting by Bernie Woodall; editing by Andre Grenon and Maureen Bavdek)