South Korea bans Volkswagen from selling 80 models

Move is punishment for faking documents on emissions and noise-level tests

SEOUL • South Korea has stripped the automaker Volkswagen of its right to sell 80 models in the country, saying it was punishment for faking documents on emissions and noise-level tests to sell 83,000 Volkswagen, Audi and Bentley cars here since 2009.

The penalties from the South Korean Ministry of Environment, which also included a fine of 17.8 billion won (S$21.4 million), came after months of investigation into Volkswagen's operations in the country.

The actions by South Korea are among the most drastic against Volkswagen since United States regulators touched off a global scandal that led the carmaker to set aside more than 18 billion euros (S$27 billion) to cover costs related to cheating emissions standards.

In the US, Volkswagen's settlements to get 482,000 emissions-cheating diesel cars off US roads won a preliminary go-ahead from a federal judge in a plan that will cost the company about US$15.3 billion (S$20.5 billion) if the agreements are fully adopted.

Back home, EU officials want the 8.5 million European owners of diesel autos from Volkswagen to get similar compensation pledged to American owners.

In November, South Korea ordered Audi Volkswagen Korea, the local subsidiary of the German auto giant, to recall 126,000 diesel-powered vehicles sold in South Korea after revoking their certifications.

Volkswagen had admitted in September 2015 that it had used emissions-cheating software in 11 million diesel cars worldwide.

South Korea at the time also fined the company 14.1 billion won.

Since then, prosecutors have raided Volkswagen offices in South Korea and questioned the company's executives, seeking to find out whether laws on clean air and other subjects had been violated.

Last month, prosecutors told the Ministry of Environment that they had found extensive forgery in documents on emissions and noise-level tests that Volkswagen had used to win government certifications. A South Korean executive of Volkswagen was indicted last month on charges of falsifying 140 such documents.

Prosecutors have indicated that they would seek similar criminal charges against other executives.

The 126,000 cars under a recall order and the 83,000 cars that the South Korean government decertified yesterday accounted for 68 per cent of all Volkswagen and Audi cars sold in South Korea since 2007, officials said.

The owners of those cars can still drive their vehicles or sell them, they said. But the revoking of certification means Volkswagen must halt most of its activity in the country.

Until now, vehicles made by Volkswagen and its Audi and Bentley brands have been among the top-selling foreign cars in South Korea.

The Volkswagen cars banned yesterday included 32 vehicle types with diesel and gasoline engines. Of them, 66 models - including the popular VW Golf and Tiguan, and the Audi A3 and A6 - had already been taken off the market voluntarily by Volkswagen.


A version of this article appeared in the print edition of The Straits Times on August 03, 2016, with the headline 'South Korea bans Volkswagen from selling 80 models'. Print Edition | Subscribe