Mercedes-Benz is recalling tens of thousands of Smart cars because of a fire risk associated with an insulation mat in the engine compartment.

The recall comes after the U.S. National Highway Traffic Safety Administration (NHTSA) began investigating unexplained engine compartment fires in 2008 and 2009 Smart vehicles.

Several such fires have also been reported in Ontario, including Ottawa.

In October, Aurélie Rossier, a Swiss woman studying in Ottawa, was heading west on Highway 417 near Bronson Avenue when the 2008 Smart car she'd borrowed from a friend burst into flames.

CBC later learned of four other unexplained fires in Smart cars in Ontario, at least three of which happened in 2008 vehicles.

Insulation at risk of deteriorating

Documents from the NHTSA say the rear insulation mat in the engine compartment of 2008 and 2009 vehicles "may deform, deteriorate and loosen over time, allowing the mat to contact hot exhaust system components."

The safety authority says Mercedes-Benz USA will notify car owners and dealers will replace the rear insulation mat with an improved one, free of charge.

It says the potential number of vehicles affected in the States is 42,781.

The recall also affects Smart car owners in Canada. Transport Canada has posted notice of the recall on its website, which says 7,028 cars are affected.

In an emailed statement, Mercedes-Benz Canada said it would also mail affected customers, who should contact a Mercedes-Benz service partner to make an appointment to replace the mat.

'We've waited forever'

Valerie Hovinga Bisset of Elmira, Ont., received an email notice of the recall on Thursday from the NHTSA, having made a report to the U.S. authority as well as Transport Canada after her car caught fire last July.

"I thought, it's about time," she said. "It seems like we've waited forever for something to be done about this."

Hovinga Bisset had already assumed the insulating mat in her 2008 Smart car was the culprit because staff at an auto repair shop discovered the material was smouldering.

She's had new material installed by a mechanic unaffiliated with Mercedes-Benz and continued to drive the car without incident.

A mechanic ripped out material from the engine compartment of Valerie Hovinga Bisset's 2008 Smart car after it began smoldering. (Valerie Hovinga Bisset)

As was the experience of other Smart car owners interviewed by CBC, Mercedes-Benz denied having ever heard of such a fire when she reported her incident, Hovinga Bisset said.

"When I first called them, I was quite clear that we knew exactly why there was smoke that day coming out of my car, and it was the insulation that was burning," she said. "I don't know why they didn't think that was a serious incident."

In the course of her research, Hovinga Bisset had also discovered she wasn't alone in her concern about that insulating fabric.

A man who identifies himself as the owner of a 2008 Smart car posted a video to Youtube in 2011, outlining his concerns and suggesting a do-it-yourself solution.

While Hovinga Bisset reported her fire to Transport Canada, the department declined to inspect her car, yet concluded it was not the result of a safety defect.

As of Thursday evening she'd received no notice of the recall from them, just from the American organization.

Transport Canada told CBC in October that it was investigating Rossier's fire in Ottawa.

It did not respond to a request on Thursday for an update on the status of that investigation or any others involving Smart cars in Canada.

Auto safety advocate welcomes recall

George Iny, director of the Automobile Protection Association, said he was "very happy" to hear about the recall, describing it as a welcome about-face by Mercedes-Benz.

"We have received sporadic reports over the years of fires in Smart vehicles, and Mercedes Canada, who distributes the Smart vehicles here, were absolutely unheeding in the cases that came to our attention," Iny said.

The recall could prevent future fires, Iny said, though he said his group has heard reports of suspicious fires in Smart cars beyond the 2008 and 2009 model years which were included in the U.S. investigation.

The defect identified in the recall may also not explain all the fires in 2008-2009 vehicles.

Marion Wyatt, the owner of a 2008 vehicle that burned in the middle of the night in Brockville, Ont., in 2010, said she found defective insulation an unsatisfying explanation for her case, in which the car had been parked for several hours before it exploded.

"There wouldn't have been any hot exhaust to contact anything," she said.

Jonathan and Marion Wyatt were asleep in their Brockville, Ont., home in November 2010 when their 2008 Smart Fortwo was destroyed by an unexplained fire. (Jonathan Wyatt)

No compensation promised

As for people whose Smart cars were destroyed by fire, it's unclear whether Mercedes-Benz will compensate those whose insurance didn't cover the loss.

Mercedes-Benz Canada declined to address that matter in its response to CBC, even though the question had been directly asked.

The best recourse for those car owners is likely a lawsuit, Iny said, but it may be difficult for them to prove that the cause of their fire was the defect identified in the recall.

He said the carmaker could also be sued by insurance companies who have compensated people whose Smart cars caught fire.