Volkswagen Suspending Sales in South Korea on Eve of Ministry Review

Volkswagen will be suspending sales of most if its models in South Korea starting July 25 (today), as pressure mounts for the German automaker over its falsified emissions reporting.

VW is preparing for an environment ministry review this month or in early August on whether to revoke certification of the 32 vehicle types offered for sale through the VW Audi brands, which would lead to a sales ban. The German automaker is due to present its case on July 25.

South Korean prosecutors last month issued the first warrant for the arrest of a VW executive in connection with the emissions scandal.

“We have decided to suspend sales of the affected models to reduce confusion among dealers and customers,” a spokesman for Volkswagen’s South Korean division said.

Sales of VW-branded cars in South Korea slumped 33 percent to 12,463 vehicles in the first half of this year, industry association data shows. The VW group’s top-selling vehicles in Korea last year were the Volkswagen Tiguan 2.0 TDI BlueMotion, with 9,467 vehicles, and the Audi A6 TDI, with 7,049 vehicles, according to the Korea Automobile Importers and Distributors Association.

Car sales by German automerks in South Korea have soared since a 2011 free-trade deal eliminated duty on vehicles imported from Europe.

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South Korea is the latest country forcing VW to take drastic measures to be accountable for its diesel emissions reporting scandal that could involve up to 11 million vehicles worldwide. Globally, the company has already set aside about 16.2 billion euros ($17.85 billion) to cover the cost of the scandal and this week said that it had set aside a further 2.2 billion euros.

“The latest costs show that the dieselgate scandal is far from dealt with,” NordLB analyst Frank Schwope said.