Fiat to pay Brazil $1.5M fine for failing to recall cars hit by alleged hub glitch

Brazil's Justice Ministry has fined Fiat S.p.A. 3 million reais ($1.5 million) for failing to recall thousands of Stilo cars built after 2004 despite an alleged rear-wheel hub problem.

In a statement published on its Web site late on Tuesday, the Justice Ministry said it had decided to impose the highest fine possible under the local consumer law "given that the producer denied the existence of the problem, putting consumers' health and safety at risk."

Fiat said in a statement it would recall the cars to allay consumers' concerns but would appeal against the ministry's decision since it had found no evidence of such a problem in the Stilo vehicles.

Fiat produced 60,000 Stilo cars in Brazil between 2004 and 2008. The Justice Ministry said in the statement the problem appeared not to concern Stilo cars with an anti-lock braking system.

Fiat produces about 700,000 cars a year in Brazil.