Korea waits as VW gives deals in Japan and U.S.

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Korea waits as VW gives deals in Japan and U.S.

While Korean customers have yet to be offered benefits, Volkswagen has lowered prices for its vehicles in Japan and is offering a damage compensation package in the United States.

In an attempt to repair its damaged reputation after the emissions rigging scandal, Volkswagen has slashed prices on a selection of models in Japan from Tuesday, according to data from the Korea Automobile Manufacturers Association on Thursday.

The Volkswagen Golf, which is popular in Japan, is being sold for about 2.5 million yen ($22,675), 160,000 yen lower than its original price tag. For the automaker’s Polo series, it added a new entry model to its line-up with prices starting from 2.5 million yen and further discounts for several models of the series.

As well as price cuts, customer service packages have also been improved. For customers who bought their cars through an auto loan program the service package offers one-time repair of bumpers or side mirrors for free. The service period for the 24-hour towing service will also be extended to five years from the current three years.

Volkswagen recorded 54,766 sales in Japan last year, an 18.8 percent year on year decline impacted by the emissions scandal.

In the United States, Volkswagen has already agreed to compensate owners of roughly 500,000 diesel cars that were fitted with faulty emissions software. The carmaker said it will pay back $5,000 to each U.S. customer, according to wire service Reuters on April.

However, no special recall or compensation plans have been announced yet for Korean customers.

“Our utmost priority is to settle the recall issue first and to gain back customers’ trust,” a spokesman for Volkswagen said. “Then we will look into feasible compensation measures for Korean customers.”

In Korea, there have been promotions such as interest-free installment of up to 36 months in November right after the scandal last year as sales of its cars plummeted in October.

The promotion brought the automaker’s sales up for a short period and helped make Volkswagen’s Tiguan 2.0 TDI BlueMotion the best-selling import car of last year.

Angry customers in Korea have filed a lawsuit against the automaker through law firm Barun. A total of 4,400 owners of Volkswagen cars joined the suit.

Volkswagen presence is declining in the nation, however. In April, it sold 784 cars in Korea, accounting for 4.39 percent of total import cars sold in Korea. The number is a whopping 70 percent drop year on year and a 78.6 percent fall compared to the previous month.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]
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