By Lee Hyo-sik
Volkswagen Korea is facing another government probe.
This time, the Fair Trade Commission (FTC) is looking into whether the German automaker ran false advertizing to promote the sale of its controversial diesel-powered vehicles.
The antitrust agency said Friday it has been examining Volkswagen’s television and print-media advertisements and the carmaker may have misled consumers with false advertizing by inflating fuel economy, emissions and other performance-related features of its Euro 5 diesel-engine vehicles.
“We are currently investigating whether Volkswagen Korea has violated the country’s display advertisement law, which bans false and exaggerated ads,” an FTC official said. “We don’t expect to announce our findings anytime soon. It will take some time.”
Volkswagen’s American unit is also facing a similar antitrust investigation for possible false advertizing.
Volkswagen Korea, headed by CEO Thomas Kuehl, was running online and offline commercials, advertising that its diesel-engine cars passed the Euro 5 emissions standard, which was introduced in 1992 to impose stricter controls on diesel vehicles.
But millions of Volkswagen vehicles sold in Korea and elsewhere over the past few years were found to have failed to meet the standard. The company admitted installing controversial software that enabled its cars to detect when their emissions were being tested and to lower them.
According to the FTC, the carmaker could face a fine equivalent to 2 percent of its annual revenue and be referred to the prosecution for criminal investigation. Consumers can also lodge a class action against Volkswagen, demanding compensation.
The FTC’s latest action came three days after the Ministry of Environment filed a criminal suit with the prosecution against Audi Volkswagen Korea over its emissions-cheating scandal.
The suit accuses Audi Volkswagen Korea CEO Johannes Thammer, who is also Audi Korea CEO, of violating the Clean Air Conservation Act. The offence can carry a prison term of up to five years and a fine up to 30 million won.
The suit came after the ministry rejected the German automaker’s recall plan. It said the scheme does not include some key elements, such as the cause of defects and detailed plans to improve its vehicles’ fuel economy and other functions after the defeat device was removed.
Early this month, Volkswagen issued a plan to recall more than 120,000 diesel-engine vehicles sold in Korea. Since 2008 through August last year, Volkswagen sold 92,247 diesel-powered vehicles under the Euro 5 emissions standard here, while local motorists bought 28,791 Audi diesel cars.
Volkswagen Korea imports 10 diesel models, including the Golf, Jetta and Tiguan, from its German plants. Its premium brand, Audi, sells four models here.
In its recall plan, the carmaker said there would be no change in fuel efficiency and power after removing the defeat device.
In November, the ministry imposed a 14.1 billion won fine on Audi Volkswagen Korea, ordering it to submit how the company would recall the vehicles and fix the problem.