By Choi Sung-jin
The two foreign businesses that are most talked about in Korea are German automaker Volkswagen and Swedish furniture company Ikea, criticized for allegedly having discriminated against local consumers.
Volkswagen is suspected of having obtained local clearance for its cars with faked documents about their noise, fuel efficiency and emissions. The company has paid compensation to U.S. buyers but refused to do the same for Korean consumers.
Ikea is pushing ahead with sales of chests and dressers that have safety problems here, although the company has stopped their sales in the United States and Canada, and extended the recall to China.
In an Environment Ministry hearing Monday, Audi Volkswagen Korea officials said there could have been some mistakes in the process of drafting the reports, ministry officials said while wanting not to be named.
Earlier this month, the ministry said it might revoke the certifications of 79 vehicle models of Audi Volkswagen Korea allegedly affected by the fraudulent documentation and suspend their local marketing until these problems are rectified. It will make the final decision on Friday.
Volkswagen officials have said the sales ban on 79 models is excessive punishment for documentation errors through mistakes or carelessness.
Government officials view it differently, however. “Although the company officials allege these have resulted from simple mistakes, these practices that ignore regulations and procedures contain grave problems that can shake the very foundation of the government’s certification system,” said Kim Jung-soo, head of the Transportation Environment Research Institute. “Sufficient administrative measures should be taken by related laws.”
Two weeks ago, Thomas Kuehl, president of Volkswagen Korea, said: “All these controversies have little to do with vehicle safety and functions. Most media stories are not true.” The remarks caused even more controversy here, with angry consumers saying the automaker, which has agreed to pay compensation of 17.4 trillion won ($15.3 billion) in the United States, is trying to get away with a “social contribution” of about 10 billion won.
On Monday, Audi Volkswagen Korea said it would voluntarily suspend sales of the 79 models in question.
Market watchers interpreted the move as aimed at maintaining a low profile until public uproar settles and avoiding the heavy penalties, from a maximum 1 billion won to 10 billion won, imposed on a car sold from Thursday when the new rule goes into effect.
Experts, while criticizing the opportunistic attitudes of the automaker, point out two factors behind its discriminatory treatment of Korean consumers. One is the lack of relevant rules and systems, such as the punitive compensation scheme in the United States.
The other is some Korean consumers’ selfish behavior. Immediately after the emissions scandal erupted, some motorists rushed to grab the automaker’s discount sales opportunities, saying: “Volkswagen cars are still better than Korean vehicles in emission and noise.”
These consumers seemed not to care about the foreign company’s dualistic stance and deceptive marketing. It was completely different from their boycott of humidifier disinfectant maker Oxy Reckitt Benckiser.
“The difference between the two is Oxy can kill you and your family but the pollution by Volkswagen cars is shared by all,” a commentator said.
The Swedish self-assembly furniture seller’s behavior also runs counter to the government’s warning. Not only is Ikea pushing ahead with sales of the dressers with safety problems, it is also promoting similar furniture on its website.
Ikea has recalled 360 million Malm dressers in the U.S. and 9 million in Canada, but has taken no similar steps in Korea, just promising refunds and providing fixing equipment to those who want them.
An Ikea Korea official said: “The website screens are changed regularly by the headquarters office and have nothing to do with the promotion of specific items.”