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US regulators say Fiat Chrysler under-reported vehicle deaths

Close up of the calender and logo of the new Fiat 500, constructed by Italian-US multinational automobile manufacturer Fiat Chrysler Automobiles (FCA) displayed in front of Arco della Pace in Milan, on July 4, 2015. Fiat Chrysler significantly under-reported the number of deaths and injuries which occurred in its vehicles, US safety regulators said Tuesday.

[CHICAGO] Fiat Chrysler significantly under-reported the number of deaths and injuries which occurred in its vehicles, US safety regulators said Tuesday.

The "significant failure" was discovered after the Italian automaker's US subsidiary agreed to pay a record US$105 million fine for failing to properly handle defects in 11 million vehicles.

It also comes as the auto industry reels from a series of scandals which have raised questions about the safety and reliability of vehicles.

"This represents a significant failure to meet a manufacturer's safety responsibilities," National Highway Traffic Safety Administration chief Mark Rosekind said in a statement.

"NHTSA will take appropriate action after gathering additional information on the scope and causes of this failure." The regulator said that the under-reporting appeared to be the result of a "number of problems" with the automaker's system for gathering and submitting data to NHTSA's early warning reporting system for auto safety.

Fiat Chrysler submitted itself to rigorous federal oversight after reaching a deal with safety regulators in July. Regulators told the automaker in late July that a "discrepancy" had been discovered in its data.

The automaker said it is investigating the "deficiencies" and has "committed to a thorough investigation, to be followed by complete remediation."

"FCA US takes this issue extremely seriously, and will continue to cooperate with NHTSA to resolve this matter and ensure these issues do not re-occur," the automaker said in a statement.

Automakers are responsible for monitoring accidents in their vehicles, and for detecting safety defects and paying to have them fixed.

Regulators said the US$105 million fine was meant to improve recall performance across the industry.

Fiat Chrysler also agreed to buy back more than half a million vehicles with defective suspension parts that could cause the vehicle to lose control. Owners of Jeeps prone to deadly fires would be given the opportunity to trade in their vehicle for more than its market value or to receive a financial incentive to have it repaired.

The previous record was as US$70 million civil fine levied against Honda last year for failing to report deaths, injuries and warranty claims to regulators.

General Motors agreed to pay US$900 million earlier this month to settle a criminal probe into its failure to recall cars with faulty ignitions linked to at least 124 deaths.

Toyota agreed in March 2014 to pay US$1.2 billion to settle US criminal charges that it lied to safety regulators and the public as it tried to cover-up deadly accelerator defects linked to dozens of deaths.

Meanwhile, Volkswagen could face billions of dollars in fines for having fitted some of its diesel cars with software capable of tricking environmental tests.