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August 3, 2016

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SK bans sales of 80 VW models, fines company

SOUTH Korea yesterday banned the sales of 80 Volkswagen AG models and handed down a US$16 million fine in its latest response to the German carmaker’s emission-cheating scandal.

The environment ministry said most of the models had been showcased for sale until recently, and added that the problem vehicles had fabricated documents for emissions and noise-level tests.

The ministry said it was revoking the certification for 80 models, or a total of around 83,000 vehicles.

“Fabricating documents is a clear violation that undermines the entire certification process,” Hong Dong-Gon, a ministry official in charge of auto environmental standards told a press briefing.

The ministry also handed down a fine of 17.8 billion won (US$16 million).

In a pre-emptive move last week, VW had already suspended the sales of cars whose certification had been challenged by the authorities.

Issuing a recall order for just three models, Hong explained that the others had fabricated documents but “no defect parts” — so were “not subject to a recall.”

He added however that the German carmaker would face a much stricter screening process once it applies for re-certification for its banned vehicles.

“Rather than just going through the papers, we will conduct a thorough review which will include on-site inspections and visiting the German headquarters if necessary,” Hong said.

He added the certification process could take much longer than the average period of three months.

A spokeswoman for Volkswagen Korea said they “regretted” the strict administrative measures.

“But since South Korea remains a very important market to us, we will try to move fast on the re-certification process,” she said.

Last month, South Korean prosecutors arrested an executive of Volkswagen’s South Korean unit as part of their investigations.

In November last year, Seoul ordered Volkswagen Korea to recall over 125,000 diesel-powered cars sold in South Korea and fined the firm 14.1 billion won.

Combining that and the latest suspension, the ministry said it had cancelled the certification of 68 percent of VW vehicles sold in South Korea since it entered the market in 2007.

Sales of VW in South Korea plunged 33 percent to 12,463 vehicles in the first half of this year from a year earlier.

The German carmaker sold 69,000 cars here in 2015.

Foreign carmakers have steadily grown their presence in the South’s auto market.


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