Korea customers ruled out in VW's compensation, but sales still strong

By Jhoo Dong-chan

German automaker Volkswagen is expected to issue a massive recall in the United States and Europe and pay compensation and environment related taxes for its customers there over its cheating in emissions tests. However, Korean customers were ruled out of the latter part of the plan according to industry insiders who say this is because sales here are still strong despite the scandal.

A Volkswagen Korea official said Tuesday that this was because related laws are different in Korea.

“The head office in Germany is approaching the issue differently in Korea because the nation has a different set of environmental standards,” she said.

Many industry insiders, however, claim that Volkswagen’s dual attitude in compensation is attributed to its strong sales in Korea despite its emissions scandal.

“I think Korean customers do not really care about environmental issues,” said a domestic automaker official.

“Their sales in Korea have barely been influenced by the scandal. Customers are still buying Volkswagen cars.”

According to the Korea Automobile Importers and Distributors Association (KAIDA), Volkswagen’s Tiguan sport utility vehicle (SUV) has so far been the best-selling model among imported vehicles this year. A total of 3,254 Tiguan SUVs have been sold in the January to May period.

Volkswagen’s Golf 2.0 hatchback took third place with 2,932 cars sold, while the automaker’s sister premium brand, Audi, sold 2,003 A6 35 TDIs, making it fifth on the list.

Due to its continued popularity, Volkswagen Korea has yet to come up with a proper recall plan to the government.

The automaker submitted three recall plans to the Ministry of Land, Infrastructure and Transport only for them to be rejected for their “poor and insincere content.”

In the U.S., however, the automaker agreed to buy back some 500,000 cars suspected of using emissions test cheating software and pay cash to Volkswagen owners in compensation.

Likewise, Volkswagen discounted prices of the automaker’s popular Golf and Polo hatchback models in Japan and offering an extended warranty service period.

Disappointed by a Volkswagen’s recall plans, the government seems to have changed its stance on disciplining the company.

"If Volkswagen used 17 unapproved parts in its emissions related system, such as fuel injectors, exhaust recirculation devices and catalytic converters, as the prosecution concluded, then the company showed no regard for our government or for its customers here by consistently violating our domestic laws," a ministry official said Friday. "Strong sanctions are needed."