Mercedes-Benz caught selling unregistered cars in Korea
By Lee Hyo-sik
Dimitris Psillakis
Mercedes-Benz Korea, headed by CEO Dimitris Psillakis, may face a prosecution investigation for selling unregistered vehicles, according to the Ministry of Land, Infrastructure and Transport Sunday.
The ministry said it has suspended the sale of Mercedes-Benz’s four S350 diesel models after the carmaker was found to have sold the vehicles with a nine-speed transmission without registering them with the authorities.
The controversial S-Class models are the S350 d, S350 d 4Matic, S350 d L and S350 d 4Matic L.
The company had reported that it was only importing and selling the cars equipped with a seven-speed transmission called the 7G-Tronic.
“Mercedes-Benz Korea notified us that it inadvertently sold the 9G-Tronic transmission-installed S350 diesel vehicles,” a ministry official said. “The company said it did not know the cars had that type of transmission. We will find out what really happened and then take appropriate actions.”
He said the ministry will decide whether to refer the case to the prosecution after concluding its probe.
Under the law, all carmakers are required to register all vehicles sold here with the transport ministry. Violators could face a 10 million won ($8,000) fine or a maximum one-year prison sentence.
The companies also have to report vehicles’ emission gas data to the Ministry of Environment. Those who don’t could pay up to 1.5 percent of vehicle value as a fine.
Mercedes-Benz Korea said as soon as it found the four S350 models, which were imported from last December, were equipped with the 9G-Tronic transmission, it notified the authorities.
“On Feb. 15, we discovered the S350 diesel models were upgraded with the 9G-Tronic transmission. The next day, we informed the government of this,” a company official said. “We also instructed our dealers to suspend the sale of the vehicles. We will register the cars with the government and follow up other legally-required procedures.”
The automaker said it has sold a total of 98 S350 diesel cars since December.
“We had no intention whatsoever to fool consumers. Right after we discovered the mistake, we informed customers and the government,” the official said. “But the thing is the vehicles have no problem. We sold the 9G-Tronic transmission-installed vehicles at the same price as the one with the 7G-Tronic transmission. We will continue to fully cooperate with government investigators and meet customer needs.”
The latest incident follows the growing controversy over the German automaker’s decision not to accept the government’s request for them to refund part of excise taxes to customers who bought its vehicles in January.
The dispute over tax refund came after the government announced in early February that it would extend the period of excise tax reduction, which expired last December, to June this year to boost consumption.
However, Mercedes and other imported auto brands claim that the tax cut has already been reflected in their promotional events in January and they informed customers over the issue. But customers said they were not fully notified by the dealers.