Hyundai Recalls Almost All of Its Excel Models : Automobiles: A problem in the engine could lead to a fire, company says, although no such incidents have been reported.

Hyundai Motor America ended 1991 by recalling nearly 900,000 of its Excel models--the car that enabled the company to set sales records in its first two years in the United States.

The recall, announced Tuesday, affects all 1986-89 Excels and all 1987-89 Mitsubishi Precis sold in this country. The Korean car maker builds the Precis for Mitsubishi.

Hyundai officials said they have identified a problem in which deteriorated parts in the engine could cause exhaust gases to melt the air filter and the smoldering plastic could then cause an engine compartment fire. Company officials said no accidents have been reported.

The recall affects about 837,000 Excels and 58,000 Precis models. Hyundai officials said all affected car owners will be notified by letter.

Hyundai created a new market in the U.S. with its low-priced Excel in 1986 and saw sales soar to more than 260,000 cars a year in 1987 and 1988.

But sales began plummeting in 1989 as Japanese car makers introduced competing products and critics began zinging the Korean cars for unreliability.

Hyundai introduced a new model, the Sonata, in 1989 and has since added two more models to its lineup--the Scoupe sports coupe in 1990 and the Elantra, an upscale subcompact, for 1992.

The recall comes during an advertising promotion by Fountain Valley-based Hyundai Motor America that emphasizes the reliability of Hyundai cars. The cornerstone of the campaign is a two-year or 24,000-mile warranty program that covers all scheduled maintenance on the Elantra model at no cost to the owner.

In a recent interview, Rod Hayden, Hyundai Motor America’s executive vice president, said the company had resolved internal quality control problems and would be working to assure buyers that Hyundai “wants to give people as worry-free a car as we can.”

If the no-cost maintenance program for the Elantra proved successful, he said, a similar program might be extended to other cars in Hyundai’s U.S. lineup.

Hyundai officials could not be reached Tuesday to comment on the impact the recall of early model Excels might have on their campaign to improve the company’s image.