SUMMARY

• Hyundai and Kia are being sued for allegedly failing to install anti-theft devices in their cars, leading to a spike in vehicle theft due to a viral TikTok challenge.
• The case, filed in the Manhattan federal court, highlights the surging number of thefts of Hyundai and Kia vehicles, especially in major cities like Chicago and Los Angeles.
• Both companies face stock value dips, alongside a recent hefty settlement in a separate consumer class-action lawsuit.

Automobile giants Hyundai and Kia, both hailing from South Korea, find themselves embroiled in a lawsuit for creating what's been termed as a "public nuisance." The legal challenge, set in the bustling cityscape of Manhattan federal court, accuses the duo of negligence in failing to equip their cars with anti-theft devices.

The stakes of the case have risen sharply due to an unforeseen consequence of the digital age: a TikTok challenge that went viral in 2021. This trend, troublingly, led adolescents to bypass security systems in cars by hot wiring them with a simple USB cable. The repercussions of this dangerous game, officials reveal, include an alarming 800% surge in Hyundai and Kia car thefts in Chicago in August 2022, and an 85% increase in Los Angeles compared to the prior year.

New York City's court filing places the blame squarely on Hyundai and Kia, accusing them of prioritizing profits over public safety. By not making engine immobilizers a standard safety feature, the defendants allegedly "created and maintained a public nuisance." The accusation goes further, saying that their decisions have triggered a worrying spike in car thefts, thereby putting public safety at risk.

The auto manufacturers, however, have responded to these allegations. Hyundai stated that it has made immobilizers standard on all vehicles since November 2021 and has taken steps to mitigate thefts. It's also liaising with the National Highway Traffic Safety Administration for customer support. Kia, too, is collaborating with law enforcement to fight the dual menace of car theft and its encouragement via social media, reaffirming its commitment to customer support and vehicle security.

However, despite these actions, the automakers’ stocks took a hit, with Hyundai Motors sliding by over 2% and Kia Corp falling by more than 5%. Last month, both companies agreed to a whopping $200 million settlement in a consumer class-action lawsuit, which, as per Reuters, included almost 9 million car owners and encompassed up to $145 million in out-of-pocket losses for customers.

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