Korea bans 80 Volkswagen models for cheating on emission, noise tests

Engineers check vehicles on standby for sale at the Audi Volkswagen PDI center in Pyeongtaek, Gyeonggi, on Tuesday. Korea’s Environment Ministry cancelled certifications for Volkswagen vehicles, which prohibits them from being sold in the Korean market. [KIM HYUN-DONG]

Korea banned the sale of 80 models of cars produced by the Volkswagen group including the Golf, the Polo, the Beetle and the Bentley because emissions and noise tests were falsified.

It also revoked the certification of an additional 83,000 vehicles sold by Audi Volkswagen Korea. Owners of those cars can continue to drive them but will have trouble reselling them.

This brings the total number of cars with revoked certifications to 209,000: 68 percent of the 307,000 Audi and Volkswagen vehicles sold in Korea since 2007 and 97 percent of Audi and Volkswagen vehicles sold in the first half of this year.

“It is against the law to gain vehicle certification through fabrication and lies,” the Environment Ministry said in its press release Tuesday.

The company was fined 17.8 billion won ($16 million). Last year, the company was fined 14.1 billion won for its so-called defeat device scandal.

The 83,000 cars were sold between 2009 and July 25 this year. The Environment Ministry revoked certifications from 126,000 cars of Audi Volkswagen Korea last November after its defeat device scandal.

Critics said the company should have been fined more.

An amendment to the Clean Air Conservation Act that went into effect last Thursday increased the maximum amount of fine per vehicle type from 1 billion won to 10 billion won. With this change, the Environment Ministry could have fined the company 68 billion won.

But Audi Volkswagen Korea announced July 21 its decision to suspend sales of models under scrutiny by the ministry - before the amendment came into effect.

“Two legal institutes advised the ministry that it is legally unsound to apply the changed regulation on the company since it suspended sales of the models under question before the amendment,” the Environment Ministry said in its press release. “Thus the ministry applied the former regulation on fines, which limits them to 1 billion won per vehicle type.”

In a hearing on July 25, Audi Volkswagen Korea reportedly admitted to manipulating the noise and emissions tests, but said that the models in question do meet the noise and emissions standards, and argued that their certifications should not be cancelled.

“We regret that the Ministry of Environment has imposed the strictest sanction in revoking our vehicle certifications,’’ the company said in its press release. “We are closely reviewing the ministry’s decision and considering all available options in deciding how to move forward.”

Some analysts called the ministry’s move a de facto closing down of Audi Volkswagen in Korea.

“If Audi Volkswagen Korea submits new certification applications to the Environment Ministry for the models in question,” said the ministry, “then the ministry will be sure to conduct actual noise and emissions tests on the vehicles and, if needed, will visit Volkswagen AG headquarters in Germany to conduct thorough tests.”

It added, “Should Audi Volkswagen Korea decide to file a suspension of execution and resume selling the models under question, the ministry can still win the case in an administrative litigation and apply the new 10 billion won fine to the company’s new sales.”

The ministry said owners of suspended cars will not be affected by the certification revocation.

“The ministry’s decision only affects Audi Volkswagen Korea, and not the customers who bought the cars,” the ministry said in its press release. “Owners of the vehicles face no restriction in owning and selling their cars.”

BY SUNG SI-YOON, ESTHER CHUNG [chung.juhee@joongang.co.kr]