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.
MAN fails to regain trust of Korean truckers amid mounting legal troubles
Owners of MAN Truck & Bus vehicles hang banners on their trucks in front of the Government Sejong Convention Center, in order to urge the German company to compensate for faulty engines in this 2018 file photo. Newsis
By Park Jae-hyuk
German commercial vehicle maker's market share plunges over safety concerns
By Park Jae-hyuk
MAN Truck & Bus, a German commercial vehicle manufacturer owned by Volkswagen Group, has failed to regain its status as the second-most-popular imported commercial vehicle brand in Korea following Volvo, since Scania, another Volkswagen Group affiliate, won the title in 2020.
Data compiled by the Korea Automobile Importers & Distributors Association showed Monday that the number of MAN's commercial vehicles newly registered in Korea last month stood at 48, down 22.6 percent from 62 in December 2022. The number of newly registered commercial vehicles made by Scania was 107 last month, up 2.9 percent from 104 in December 2022.
In 2022, MAN was the only imported commercial vehicle brand that showed a decline in the number of newly registered vehicles. The number of its commercial vehicles registered newly in Korea last year was 953, a 6 percent drop year-on-year from 1,014. In contrast, Scania enjoyed a 15.8 percent year-on-year increase to 1,564.
MAN's declining popularity has been attributed mainly to its lingering legal disputes with truckers in Korea over alleged defects in its vehicles, which have caused safety concerns.
The company was first embroiled in conflicts in 2018 with Korean truck owners, who hired one of the nation's major law firms, Barun Law, to take legal action against the German truck maker's local subsidiary, MAN Truck & Bus Korea.
At that time, the truckers complained about the engines of their trucks getting rusty because of malfunctioning water retarders. Some of them even claimed there were also problems with steering wheels, brake pedals and retarders in MAN's vehicles.
After the Ministry of Land, Infrastructure and Transport started paying attention to this issue, MAN announced it “voluntarily” decided to recall its dump trucks, while denying the claims over engine defects in its vehicles. The company said that faulty cooling hoses caused damage to the engines.
MAN's top executives also apologized to Korean customers, making an agreement with truckers that the company would guarantee free repairs for a longer period of time.
MAN Truck & Bus Korea Managing Director Thomas Hemmerich / Courtesy of MAN Truck & Bus Korea
In 2020, however, some owners of MAN's vehicles sued the company once again, alleging that it has failed to fulfill the agreement.
Instead of hiring Barun again, the truckers hired another law firm, Geon Woo, to ask MAN for compensation.
“We will get justice with the results of the Korea Transportation Safety Authority's test on MAN's engines,” lawyer Kim Sung-min from Geon Woo said.
In a separate lawsuit handled by another lawyer, the Suwon District Court recently ruled against owners of MAN's vehicles, who asked for the cancellation of their contracts with the company to purchase the vehicles.
In response to that result, Kim pointed out the court still acknowledged defects in MAN's vehicles.
“Although the court acknowledged defects in MAN's vehicles, the judge saw that the defects were not significant enough for the cancellation of the sales contracts,” the lawyer said.
Amid the ongoing controversy, MAN Truck & Bus Korea claims that it has fulfilled the agreement with its customers.
“MAN aims to finish the voluntary recalls that started two years ago by the end of this year, in order to fulfill its responsibility for defects in its products,” the truck maker's PR agency said.
MAN's high-ranking executives have also been continuously emphasizing the importance of the Korean market, so as to restore customer trust. In 2021, the company designated Korea as the headquarters to supervise MAN's operations in 12 countries in the Asia-Pacific region.
Automotive industry experts, however, still expect MAN to face difficulties in rehabilitating its market share in Korea.
When the controversy first broke out in 2018, they warned that the company could suffer a falling market share, considering the fact that truckers in Korea are well organized and engine defects are directly related to safety issues.
“Korean truckers purchased the expensive imported trucks as they believed the trucks would be convenient and safer,” said Kim Pil-soo, a professor at Daelim University's Division of Automotive Engineering.