Volkswagen to halt sales of most vehicles in South Korea amid emissions probe – Reuters
SEOUL Volkswagen (VOWG_p.DE) will suspend sales of most of its vehicle models in South Korea from July 25, as pressure builds on the German automaker over its falsified emissions tests.
The move comes as Volkswagen has struggled with a sales slump in South Korea, Asia’s second-biggest diesel car market, after the firm admitted in the United States to using software to cheat on emissions tests on some diesel cars.
It also comes ahead of an environment ministry review later this month or in early August on whether to revoke the certification of 32 vehicle types made by Volkswagen, its Audi and Bentley units, which would lead to a sales ban of the affected models in the country.
It is expected to take several months for Volkswagen to achieve certification again for the models.
South Korean prosecutors had notified the ministry of the list of models, accusing Volkswagen’s South Korean unit of fabricating documents on emissions and noise-level tests, the ministry said. Prosecutors last month arrested a local Volkswagen executive, as part of a widening probe.
“We have decided to suspend sales of the affected models to reduce confusion among dealers and customers,” a spokesman for Volkswagen’s South Korean unit said.
Volkswagen, Europe’s biggest car maker, will decide whether or not to take a legal action against South Korea’s planned decision, which will come after the company presents its case to the ministry on July 25, he said.
Volkswagen alone saw South Korean sales slump 33 percent to 12,463 vehicles in the first half of this year from a year earlier, according to the industry association’s data.
Globally, the company has already set aside about $18 billion to cover the cost of the scandal, mainly vehicle refits and a settlement with U.S. authorities, and analysts had expected lawsuits and potential regulatory fines to increase that number.
(Reporting by Hyunjoo Jin; Editing by Muralikumar Anantharaman)