By Choi Sung-jin
Volkswagen’s sales in the United States are about eight times larger than in Korea, according to the German automaker and the Korea Automobile Importers & Distributors Association. But in November, the sales gap was reduced to a little more than five times, 23,882 to 4,517 cars.
That means Volkswagen’s sales in Korea, unlike those in the U.S. and most other countries, surged after the carmaker’s emission scandal broke out, thanks in large part to its drastic price-discount policy here.
It is against this backdrop that about 4,000 Korean drivers of the German-brand cars are taking legal action against Volkswagen to cancel their sales contracts and claim the return of unjust profit, complaining about differential treatment of U.S. and Korean consumers.
Volkswagen has been offering a “goodwill package” – gift coupons, vouchers and three-year free repairs totaling $1,000 – to U.S. and Canadian owners of diesel cars that had manipulated emission levels. The emission riggings were confirmed among Volkswagen cars running here but the company’s local offshoot is yet to present any compensation plans months after the scandal surfaced.
It has rejected local consumers’ demands for the same goodwill package as well as the Environment Ministry’s recommendation to examine a compensation plan to raise its recall-correction rate.
Instead, Volkswagen has been bent only on increasing sales with sweeping price cuts of up to 17 million won, depending on models. The result was the record sales of 4,517 last month, topping the list of imported vehicles. Volkswagen’s Tiguan 2.0 TDI Blue Motion has also become the best-selling imported car with cumulative sales of 8,269 cars, beating the Audi A6 35 TDI (6,349), in the first 11 months of this year.
The sales boom of Volkswagen models is unique to Korea, given the automaker’s global sales in November dropped 2.2 percent to 833,700 cars, and those in U.S. markets plunged 24.7 percent. It also could give the wrong impression to foreign automakers that they can get away with cheating consumers here as long as they give big discounts to buyers later. Volkswagen's price-cutting strategy is like killing domestic consumers twice as it can also pull down the price of their secondhand cars.
Volkswagen’s neglect of Korean consumers could be seen in its recall plan, too, market watchers said. In the run-up to the recalls early next year, the carmaker said it has found a “technological solution” that can satisfy emission standards while causing no adverse effects to engine power, fuel efficiency and overall performance. Yet VW said this technological solution does not apply to cars and services sold in the U.S. and Canada, acknowledging it is a solution applicable only to easy targets.
“There is nothing Volkswagen has done for Korean owners of its cars,” said a lawyer engaged in legal proceedings on behalf of Korean drivers. Some plaintiffs are considering adding fraud charges, which, if proved, could lead to the refund of entire payments, he added.