VW/Audi Issues Apology in Korea; Lawmakers, Lawyers Show No Mercy

It’s a tough week to be an executive with Audi Volkswagen Korea, as the National Assembly, jeering environmentalists, law firms and disgruntled customers gang up on the automaker following its diesel-emissions scandal that affects 11 million vehicles worldwide.

Volkswagen Korea President Thomas Kuehl testified Thursday before the Land, Infrastructure and Transport Committee of Korea’s National Assembly, and many of the lawmakers are far from happy with his proposal for a recall. With him, taking the heat in his support, is his boss, Johannes Thammer, CEO of Audi Volkswagen Korea.

Both VW and Audi published letters of apology in Korea’s principal newspapers this week, but distrust and opposition is rampant.

The VW letter, written over Kuehl’s signature, reads, “We sincerely apologize for making our customers lose their trust in the wake of Volkswagen’s diesel engine emission issue.

“Volkswagen Korea is working closely with the Korean government to resolve this and it will faithfully carry out every possible measure, including a recall.”

The public apology states that no VW cars now being sold in Korea have the rigged computer-control systems that enable diesel-equipped vehicles to pass lab tests but switch off the emission controls when in normal driving mode.

VW Korea spokesmen say the company plans to send personal letters to about 92,000 customers whose cars may be affected.

Some lawmakers are questioning VW Korea’s sincerity and think the automaker is trying to cover up the scope of the problem.

Lee-in Young, a legislator with the main opposition New Politics Alliance for Democracy, tells news media the website VW set up so that customers can determine if their vehicle will be recalled lists only models equipped with EA 189 Euro 5-certified diesel engines. It does not include EA288 Euro 6 engines, also suspected of being rigged with the emissions-cheating software.

Protesters representing the Korea Federation for Environmental Movements have taken to Seoul streets wearing Pinocchio masks with a VW symbol on the end of the puppet’s long nose. They carry signs urging VW to “come clean about the emission problem.”

Some lawmakers contend a recall notice to fix the software will not be effective, unless some special incentives are offered to induce owners to comply. They say owners of affected VWs stand to gain nothing, except to help make cleaner air, by returning vehicles to get the fix. If they answer the recall, it will degrade engine output and fuel efficiency – which are among the things that caused owners to consider buying a VW vehicle in the first place.

Barun Law, a major law firm that says it now has 500 clients in various stages of suing VW Korea and Audi Korea and another 500 starting the process, is urging its clients not to answer any recalls.

A spokesman for the firm says it is possible VW would try to defend against claimed damages in court by claiming it already has fixed the problem. The lawsuits must be filed one at a time and it will take considerable time to place them all before the courts.

The Barun spokesman says the lawsuits are being filed with a double-barreled complaint for strategic purposes. One part of the complaint demands VW cancel the purchase contracts and make refunds. The second part asks for damages of 30 million won ($26,000), a fail-safe tactic in the event the court does not rule positively on the purchase-cancellation part of the lawsuit.

The Barun spokesman expects as many as 10,000 VW owners to file lawsuits – at least 10% of those whose vehicles are affected.

Audi Korea also has placed letters in major Korean-language newspapers and on its website apologizing for the emission scandal.

Korea’s Ministry of the Environment has completed laboratory emissions tests on confiscated VW Golf, Jetta, Beetle, Tiguan and Audi A3 and A4 vehicles and says all vehicles met certification levels. Currently, the vehicles are undergoing road testing that the Ministry suspects may show less laudatory results.

It is difficult at this point to determine what the real impact of the scandal on VW and Audi sales in Korea will be.

The Korea Automobile Importers and Distributors Assn. reports VW’s September sales were down 7.8% from August with 3,145 vehicles sold, while Korea’s import-car segment grew 12%. However, Audi Korea’s sales were up 22% from August, with 3,401 vehicles sold.