Volkswagen Halts Vehicle Sales in South Korea

The fallout from Volkswagen’s dieselgate scandal continues. The embattled German automaker has suspended sales in South Korea, according to a report from The Wall Street Journal. Starting today, VW sales in the country will halt for at least three months.

We had heard previously that the South Korean government was deciding whether or not to revoke certification for a number of VW Group products in the wake of the emissions scandal. Based on a letter from Audi Volkswagen Korea to local dealers, it seems like the company has chosen to suspend sales to preempt that revocation. VW said in the letter that it would stop delivering 79 models of 34 vehicle types. Those models include the Volkswagen Golf, Jetta, and Tiguan, which rank among South Korea’s top imported cars, according to WSJ. Sales of Audi models will also cease.

“This decision doesn’t mean that Volkswagen is pulling out of Korea, which is a very important market to us,” a Volkswagen Korea spokesperson told WSJ. “We’ll reapply for certification of our cars if the government revokes it. The process may take several months.”

If certification is revoked, VW would have to recall roughly 79,000 vehicles and pay fines. This would be a significant setback for the automaker, which saw sales boom after a 2011 free-trade deal slashed duties on cars imported from Europe. South Korea imported 24 percent more cars last year, and a third of those were VW Group products. Since news of the emissions scandal broke, sales have declined sharply. Korean VW sales for the first half of 2016 are down 33 percent from the same period last year.

An executive for Volkswagen Korea that was arrested last month was recently indicted for falsifying more than a hundred emissions and noise documents going as far back as 2010. The executive is the first to be personally indicted on charges relating to VW’s scandal. Volkswagen was fined $12.3 million by the South Korean government back in November.

Source: The Wall Street Journal (Subscription required)

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