Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
BMW fined $10 million for delayed recall
Park Sim-soo, right, a professor of automotive engineering at Korea University who led the investigation into fires involving BMW vehicles, announces the result of the investigation at the Government Complex Seoul, Monday. / Korea Times photo by Shim Hyun-chul
By Park Jae-hyuk
By Park Jae-hyuk
BMW will face an 11.2 billion won ($9.9 million) fine and prosecution investigation for its belated recall and alleged attempts to conceal defects that caused a series of fires in its diesel vehicles, the Ministry of Land, Infrastructure and Transport said Monday.
The measures came based on findings of the Korea Transportation Safety Authority that led the public-private investigation into fires involving BMW vehicles.
The joint investigation team consisting of 32 experts said Monday it discovered faulty exhaust gas recirculation (EGR) valves ― not EGR bypass valves ― were the main cause of the engine fires.
The German carmaker has claimed the opening of an EGR bypass valve caused fires, saying a possible coolant leak from an EGR cooler may have caused melting of the intake manifold and in rare cases a fire. The company has therefore replaced EGR modules in 172,080 diesel cars.
However, the investigators said they discovered possible “boiling” in EGR coolers and have demanded an explanation from the carmaker.
The research team also recommended a recall of the intake manifold, saying possible damage to the auto parts can cause a fire, regardless of the EGR module recall. As the team said, a BMW 520d caught fire Oct. 1, although its owner had already replaced the EGR module.
“BMW said it has been aware of the correlation between EGR error and fire since July 20, but we found out its German headquarters had formed a taskforce in October 2015, to reduce risks of fire by fixing cracks in the EGR cooler,” Korea Automobile Testing & Research Institute head Ryu Do-jung, one of two team leaders, told reporters at the Government Complex in Seoul.
“The company has also mentioned cracks in EGR coolers and perforated intake manifolds in its in-house reports since July 2017. In addition, BMW belatedly recalled 65,763 cars Oct. 19, although they were equipped with engines and EGR modules which were also used for 106,317 diesel vehicles that were subject to the first recall that began July 25.”
Based on the investigation results, the transport ministry decided to impose a heavy fine on BMW.
Kim Kyung-wook, head of the transport ministry's transport and logistics office, said the government would also demand BMW carry out an immediate recall of intake manifolds in all the 172,080 vehicles that were subject to previous recalls.
After the announcement, BMW said the outcome of the team's investigation corresponds approximately with the results of the company's own research.
“The ministry confirmed the basic cause of fires was coolant leaks from EGR coolers,” the automaker said in a statement. “Engine fires do not break out without a leak in the EGR cooler. Given that the cause of previous fires was a hardware defect, the recall of the EGR cooler can be a fundamental solution.”
The company also said a leak is the only cause of damage to the intake manifold.
“We agree with the ministry that says a recall of intake manifolds is necessary, if the EGR cooler is leaking,” it said. “We have already replaced intake manifolds in 2,200 cars with EGR cooler leaks.”
The so-called “BMW fire victims group” consisting of 1,000 BMW car owners in Korea said they are satisfied with the joint investigation team's announcement.
“We are satisfied with the joint investigation team's decision to urge BMW to replace intake manifolds with new ones,” Ha Jong-sun of Barun Law, who is leading a class action suit against BMW over fire-prone engines, said during a press conference at his law firm in Seoul, Monday. “However, the government should order BMW to recall all of its cars, even if they were not subject to the previous recalls.”
The lawyer expects more BMW owners will file lawsuits against the carmaker, following the government announcement.