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The impact of the emission scandal in South Korea
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Between 2009 and 2015 Volkswagen installed ‘defeat devices’ (software that cheated emissions testing) in their models making their cars appear better for the environment. The software allowed the cars to fool emissions testing by knowing when to switch the emissions control software on. When the car was not being tested, the software was switched off, and the cars emitted nitrogen oxide up to 40 times more.
The Volkswagen emissions scandal has impacted a substantial amount of people across the globe. Not only that, it’s affecting businesses all around the world too.
In South Korea, in the affluent Gangnam area of Seoul, the three-story Volkswagen showroom has just two models on display. The CC 2.0 TSI and Touareg were the only two cars that were allowed to be sold in Korea after the government put a ban on sales and went ahead with a decertification move that has affected a wide range of Volkswagen vehicles.
On 2nd August 2016 the Environment minister revoked the certification of 80 models of Volkswagen, Audi and Bentley vehicles. These vehicles were found to be cheating emissions tests have been banned from being sold.
This decision by the Korean Government has had a serious financial impact on Volkswagen and also resulted in a drop in market share on top of a fine of 17.8 billion won ($16.02 million).
Volkswagen dealers have become increasingly frustrated with some losing their main source of income and considering leaving the brand for good. Many dealers have already left according to industry insiders – something that will look to continue if countermeasures are not put in place.
Recertification
Audi Volkswagen Korea is seeking recertification as soon as possible, but it is going to take longer than the usual three months due to thorough investigations being conducted by the ministry. During this time it means many dealers reliant on Volkswagen will have their incomes slashed heavily.
The Volkswagen showroom in Apgujeong, southern Seoul, one of the main Volkswagen showrooms, have already closed down after 11 years of trading.
Audi also hit
The sales of Audi decreased by 42.5%, and Audi’s posh Cheongdam-dong showroom was empty the day after the ministry’s punitive measures came into force.
Dealers that handle used VW cars are becoming anxious as “No one wants Volkswagen any more.”
Prices have dived by 11.9% since October according to SK Encar since the emissions scandal went global and will continue to dive even more since the sales ban.
Audi Volkswagen Korea has not made definitive plans to dealers or customers about whether they will be leaving the market or not.
Source: https://www.koreaherald.com/view.php?ud=20160807000195
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