Volkswagen scandal could hit import sales

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Volkswagen scandal could hit import sales

Volkswagen’s emissions scandal has quickly become a global issue, and Korea’s import market - led by German brands like Volkswagen, Mercedes-Benz and BMW - is expected to see its sales impacted.

After news that Volkswagen had equipped some of its diesel vehicles with software to cheat emissions tests, the Ministry of Environment said Tuesday it would test the emissions of certain models imported to Korea.

Later that day, however, Volkswagen Group admitted that 11 million of its cars had been equipped with the software - substantially more than had previously been disclosed - though it didn’t specify where those vehicles had been sold.

The region most likely affected is Europe, where the company leads the market and accounts for more than 25 percent of all vehicles sold.

Still, the Ministry of Land, Infrastructure and Transport announced Wednesday it would re-run a fuel efficiency test on two Audi sedans, as the company is under the umbrella of Volkswagen Group and fuel efficiency could have been affected by the software.

The A3 and A7 sedans were among the 21 cars that underwent fuel efficiency tests by the ministry this year.

In order to meet the new Euro 6 standards that strengthened regulations on emissions, every global automaker had to install an additional emission reduction device.

Allegedly, Volkswagen planted software in the system to make the device operate only during emissions tests.

Industry insiders said the scandal might impact the local import car market. Through August, the market share for Volkswagen was 15.6 percent with a total of 24,778 cars sold, the third most among imports this year. Audi was also one of the most favored brands by Koreans, with a market share of 12.56 percent. In August, Volkswagen’s Passat 2.0 TDI was the best-selling diesel import with 854 sold, followed by Audi’s A6 35 TDI (795) and Volkswagen’s Golf 2.0 TDI hatchback (740).

“Considering the similar scandal with Toyota in the past, the overall sales for Volkswagen might decrease,” said Ko Tae-bong, an analyst at Hi Investment & Securities. “Korea is a sensitive market for diesel cars. About 67 percent of imports sold in the country through August were diesel, and Korean consumers might now be more careful buying imports.”

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