Audi Volkswagen to recall 120,000 cars in Korea

Audi Volkswagen to recall 120,000 cars in Korea

Volkswagen and its premium brand Audi will recall more than 120,000 diesel-engine vehicles sold in Korea, following the emissions-cheating scandal, the companies said Thursday. If confirmed by the government, this would be the largest recall ever by an automaker in the country’s history.

The German carmakers said they submitted a recall plan, including technical solutions and corrective measures, to the Ministry of Environment (MOE) Wednesday. But they did not say whether they would compensate Korean customers affected by the massive recall.

“The ministry is currently reviewing our plan so we cannot discuss its details,” a Volkswagen Korea spokeswoman said.

She said Volkswagen has not decided how or even whether it will compensate affected customers. Volkswagen and Audi have been criticized by their customers for months, who argue that they have mistreated and discriminated against local customers compared to those in other countries.

Immediately after the emissions cheating scandal, the German automakers offered a $1,000 voucher and other compensation schemes to their American and Canadian customers, but they have not followed suit for Korean buyers.

In cooperation with the Ministry of Land, Infrastructure and Transport (MOLIT), the MOE is expected to review Volkswagen and Audi’s recall plans. It normally takes less than a month for the government to approve the plans, but given the sensitive nature of the matter, it may take longer.

Since 2008 through August last year, Volkswagen sold 92,247 diesel-powered vehicles under the Euro 5 emissions standard here, while local motorists purchased 28,791 Audi diesel cars.

Volkswagen Korea imports 10 diesel models including the Golf, Jetta and Tiguan from its German plants. Its premium brand Audi sells four models here.

In November, the MOE imposed a 14.1 billion won ($12 million) fine on Volkswagen Korea and Audi Korea after their vehicles sold here were found to have software that enables the cars to detect when their emissions are being tested and to lower emissions.

MOLIT then ordered the German carmakers to submit how they would recall the problematic vehicles and fix the problem.

In the United States, they have issued a recall for 482,000 cars.

Too lenient toward Audi Volkswagen?

Meanwhile, the government has been under fire for being too lenient toward Volkswagen, having imposed a 14.1 billion won fine for its emissions-cheating. That compares to $18 billion sought by its U.S. counterpart.

Volkswagen buyers who filed a class-action lawsuit are calling on the MOE to take harsher measures against the carmaker.

However, despite the escalating criticism, the MOE said it will not take additional action against Volkswagen beyond the 14.1 billion won fine imposed last November. The ministry said it has done everything to penalize Volkswagen under the law.

“Since the U.S. Department of Justice filed a suit against the German automaker on Monday, some consumer advocacy groups have raised their voices, demanding the government take tougher action against the company,” said Hong Dong-gon, the head of the MOE’s transportation environment division. “But we already completed penalizing Volkswagen by imposing the 14.1 billion won fine. That amount was the maximum we could under the law.”

Hong said the U.S. government can only go through the court system to impose fines on private entities in violation of the law.

“In Korea, government agencies can impose a fine on companies without having to go to court,” he said. “But the U.S. government has to sue violators first and levy the fines in accordance with the rulings. This is what the U.S. is doing against Volkswagen.”

However, Barun, which represents the plaintiffs in the class-action suit against Volkswagen, said the government should seek criminal charges against the carmaker.

“Rather than imposing a mere 14 billion won fine, the environment ministry should treat Volkswagen’s emissions cheating as a criminal case,” said Ha Jong-sun, an attorney at Barun. “The automaker violated the Clean Air Conservation Act so the ministry should refer it to the prosecution. Volkswagen should be punished criminally too.”

On Jan. 4, the U.S. Department of Justice said it will file a suit against Volkswagen on behalf of the Environmental Protection Agency (EPA) for violating clean air laws.

The complaint alleges that nearly 600,000 diesel vehicles sold in the U.S. were equipped with the cheat devices that allowed the cars to pass emissions testing despite emitting far more than the legal limit of certain pollutants during regular operation.

The lawsuit carries penalties that could cost the German carmaker more than $30,000 per vehicle, which could total as much as $18 billion.

“Besides the 14.1 billion won administrative penalty, about 3,000 Volkswagen consumers have filed a class-action suit against the German automaker both in Korea and the United States, demanding the cancellation of their purchases and full refunds,” Hong said. “At the moment, the government can’t take any punitive steps against Volkswagen unless a new wrongdoing is discovered.”

Source: http://www.koreatimes.co.kr/www/news/biz/2016/01/123_194906.html

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