By Lee Hyo-sik
Mercedes-Benz, Porsche and other foreign import car brands are found to be stingy in making social contributions, while sending the lion’s share of their earnings here back to headquarters in Europe and elsewhere.
Foreign car brands also face criticism for their reluctance to expand their business-related facilities here and create jobs.
Critics say that rather than simply taking money out of Korea, foreign car importers should return larger portions of their profits to the local community if they want to do business here for the long run.
According to audits released by the Financial Supervisory Service (FSS), Thursday, Mercedes-Benz Korea (MBK) and seven other import car brands spent a combined 4.2 billion won ($3.7 million) in 2015 to finance their corporate social responsibility (CSR) programs.
MBK spent 2 billion won last year on implementing CSR programs, followed by BMW’s 1.8 billion won and Porsche Korea’s 150 million won. But Audi-Volkswagen Korea, FCA Korea and Volvo Korea did not spend even a penny.
The eight companies sent a total of 83.6 billion won in dividends to their headquarters abroad, 20 times more than their corporate giving in Korea, which shows they were eager to pay handsome dividends to shareholders in their home countries.
In 2015, MBK transferred 58.5 billion won in dividends to its shareholders in Germany, 66 percent of its 88.7 billion won net profit. In 2014, the German auto brand also paid out 50 percent of its net profit in dividends.
This suggests that the German car brand decided to send more money back to its German headquarters rather than invest more locally to hire workers and expand its business.
Audi-Volkswagen Korea, which did not spend even a penny on CSR, paid 16 billion won, or half of its 2015 net profit, in dividends to its German headquarters.
Porsche Korea also paid all of its 60 billion won net profit in dividends to its shareholders abroad, while spending a mere 150 million won to implement several CSR programs.
Volvo Korea sent 3 billion won in dividends to its headquarters last year but did not spend anything on CSR.
“Everybody knows that foreign car brands’ dividend payments are excessive,” said an official at the Citizens’ Coalition for Economic Justice. “They say that they are doing so in accordance with their headquarters policies. But that is such a lame excuse. They should refrain from paying such high dividends and instead increase spending to support the local community.”
The official also urged foreign carmakers to hire more university graduates and build more business facilities if they want to do business here. “Given that they generate hundreds of billions of won in profit each year, they should also fulfill their responsibility as corporate citizens by helping the underprivileged.”
According to the FSS audits, foreign car importers have been reluctant to expand their workforces here in recent years, despite surging sales.
MBK, which posted 3.14 trillion won in sales in 2015, has only 168 local employees. Similarly, BMW Korea and Audi-Volkswagen Korea, which posted over 2 trillion won in sales last year, are found to have only 175 and 167 on their payrolls, respectively.