Hyundai & Kia shares plunge on German raid over alleged defeat devices

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Hyundai Motor Company and its subsidiary Kia Corporation's shares have plunged as German regulators reportedly raided the automakers' local headquarters over allegations that they had equipped some of their combustion vehicles with defeat devices.

The South Korean automotive giant’s shares fell by 5.7% to USD 135.17, while Kia’s plummeted 6.1% to USD 59.23 per share. Among its other affiliates, automakers component manufacturer Hyundai Mobis Company's shares dropped by 3.6% to USD 153.27, while logistics firm Hyundai Glovis Co. Ltd. dipped by 1.1% 

to USD 140.95.

Sources claimed that Hyundai and Kia had sold more than 200,000 diesel automobiles in Germany that were suspected to include illegal defeat devices. The South Korean automaker has acknowledged the raid by German prosecutors and is cooperating with them on the issue.

For those unaware, devices or software that lower car emissions are known as defeat devices that automakers might use to rig emissions tests.

However, Germany has investigated several domestic automakers regarding potential emissions manipulation in their combustion vehicles. Even Hyundai is one of the corporations under investigation, though the scope of the inquiry is expected to be expanded.

Volkswagen, meanwhile, has struggled to cope with poor sales in South Korea given the controversy involving emissions cheating, which officially began in 2015 when it was revealed by the United States that the German automaker had cheated on its regional diesel emissions tests.

In 2016, the automaker willfully stopped selling its automobiles in South Korea after the Seoul government declared it would forbid the sale of all Volkswagen and Audi vehicles and levy stiff fines for cheating on emissions tests.

However, Volkswagen restarted selling cars under the brands Audi, Lamborghini, and Bentley in South Korea in 2018.

Source Credit:

https://www.business-standard.com/article/companies/hyundai-s-shares-nosedive-on-german-raid-over-defeat-car-devices-122062900546_1.html