Brazil's Justice Ministry has fined Fiat $1.7 million, citing the automaker's failure to recall its Stilo models to fix a wheel problem that has possibly caused eight deaths in the South American country.

The Justice Ministry said Fiat must call back all the vehicles made since 2004 because of a problem that may cause the wheels to fall off, according to a statement posted on the ministry's Web site yesterday. Brazil has investigated 30 accidents involving the Stilo, including the eight deaths, Renato Ferreira de Oliveira, Justice Ministry's spokesman, said in a telephone interview in Brasilia today.

Fiat's recall is the seventh in Brazil this year, said Oliveira. Volkswagen AG's recall of 193,620 Novo Gol and Voyage vehicles last month is the largest one in the country in 2010. Brazil had 39 car recalls last year up from 27 in 2008, according to the Justice Ministry.

Brazil is Fiat's biggest market by sales. The Italian automaker denied any wrongdoing in a statement published in O Estado de S. Paulo today. Fiat said it will recall the vehicles and challenge the decision. The Turin, Italy-based company doesn't know yet how many cars it must recall, according to a spokesman, who can't be identified because of internal rules. Fiat sells the Brazilian made Stilo in the country and exports it to other Latin American countries, the spokesman said.

Fiat may face an additional fine of as much as 3 million reais by the Sao Paulo State Consumer Defense and Protection Department, known as Procon-SP, the Justice Ministry's statement said.