VW’s sales in Korea are screeching to a standstill

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VW’s sales in Korea are screeching to a standstill

Audi Volkswagen Korea decided to discontinue sales of 34 models suspected to have faked their noise and emissions test results.

That will bring the German automaker’s business in Korea to a screeching halt.

According to the automaker on Friday, it sent an e-mail announcing a voluntary sales ban to all of its domestic dealerships the previous night. The sales ban will begin from Monday.

The move comes a week ahead of a hearing by the Environment Ministry in which administrative punishments for sales of suspect models will be discussed. The ministry proposed earlier this month that it will cancel certifications and ban sales of models that faked their test results by July 29.

“The [German] headquarters and the Korean corporation have both discussed the matter and decided to stop sales of the suspect models until the case is settled,” a spokesperson for Volkswagen said. “The sales ban is for 34 models the government found to have manipulated test results for sales certification and not the cars involved in the emissions-rigging scandal.”

Earlier this month, long after the VW emissions rigging scandal broke late last year, the Seoul Central District Prosecutor’s Office spotted additional instances of the automaker fabricating vehicle test results to pass national inspections. It asked the ministry to take administrative measures.

Recall orders for 125,522 vehicles by the Environment Ministry are still in limbo because the automaker failed to admit it used a so-called defeat device when it submitted its recall plans to the ministry. Its plans were rejected three times and the automaker has been asked to start from scratch for its recall procedure.

“We will take care of this [document manipulation] case first and then work on the recall plans,” the spokesman added.

The models subject to the sales ban include most of the models popular with Korean customers, such as Volkswagen’s Tiguan sport-utility vehicle, Golf hatchback and Jetta sedan and Audi’s A4 and A8 sedans. Until these cars are certified again by the government for noise, fuel efficiency and emissions, Volkswagen’s business in Korea will basically be over.

“The prosecution has come forward with concrete evidence of the automaker fabricating test results for noise and fuel efficiency, which is a serious crime, and there is no reason for the ministry to slow down on taking administrative measures,” an official from the Environment Ministry said.

The automaker’s Korean unit will participate in next Friday’s hearing. Volkswagen Korea CEO Thomas Kuehl said through an e-mail to dealers Thursday that the hearing will be a chance to explain the company’s position.

Volkswagen was riding high in Korea, selling some 250,000 cars locally over the last 10 years.

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