S. Korea bans sales, nullifies certifications of Volkswagen vehicles

SEOUL, Aug. 2 (Yonhap) — South Korea’s government on Tuesday banned sales and revoked the certifications of 80 vehicle models of Audi Volkswagen Korea, which has been suspected of obtaining permission to sell cars here by fabricating reports.

Under the administrative measure, the Ministry of Environment separately slapped the German automaker with fines of 17.8 billion won (US$16 million) for 47 models that are thought to have passed the local authentication process by cheating on gas emissions tests.

The punitive measure was announced after an extensive probe into the company over the allegations that it obtained approval from the local authorities with faked reports on noise level, fuel efficiency and emissions results.

This graphic, provided by Yonhap News TV, shows logos of the Ministry of Environment and Volkswagen, and the German automaker’s vehicles and a dealership.

The number of vehicles subject to the administrative measure is 83,000. The vehicles are those that the automaker sold in South Korea between 2009 and July 25 this year, Seoul officials explained.

The total number of Audi and Volkswagen vehicles, whose certifications have been canceled so far, is 209,000, some 68 percent of more than 300,000 cars that the automaker has sold here from 2007 onwards.

The environment ministry said that its actions will not affect the users of the models subject to the measure, and that the drivers will not have any restrictions in the selling of their vehicles.

Audi Volkswagen Korea offered an apology and said it would consider legal measures.

“The company again apologizes for causing worries through this incident,” the automaker said in a statement posted on the website, but noted that the “most severe” measure is regrettable.

Volkswagen cars are parked at the port of Pyeongtaek, south of Seoul, on Aug. 2, 2016.

Audi Volkswagen said it would “consider possible countermeasures” such as an injunction of execution or taking legal action against the ministry’s decision to recover the company’s business reputation and to restore the trust of consumers, dealers and other business partners.

Around 20,000 people work either for Audi Volkswagen Korea or as dealers, industry sources said.

“Dealers will be greatly affected as incentives from sales are the main source of our income,” a Volkswagen dealer said on the condition of anonymity, adding that the discussion is underway with Audi Volkswagen Korea on how to minimize the losses.

In January, the ministry filed a complaint with the prosecution, claiming that the local unit of the German carmaker violated the Clean Air Conservation Act by cheating on gas emissions tests.

During its probe into the scandal, the investigators found evidence showing that the automaker doctored reports to gain permission for the sale of its cars here. Early last month, the investigators notified the ministry of its investigation results.