Korea OKs VW Recall Plan But Points Finger at BMW, Nissan, Porsche

At long last Volkswagen Korea comes up with a recall plan for correcting defects in 126,000 vehicles that used rigged software that controlled diesel-engine emissions during test procedures, but permitted nitrogen-oxide emissions to soar to as much as 31 times the legal limit in real-world driving.

At the same time it approves the VW recall plan, the Ministry of the Environment reveals BMW, Nissan and Porsche also cheated on emissions certification by submitting fraudulent documents and says it may decertify and ban sales of 10 of their vehicles as early as next month.

The Ministry pulled certification of 126,000 VW Korea vehicles and demanded their recall a year ago. It has taken this long for VW Korea to admit it cheated on the tests and to develop a satisfactory recall plan, which calls for all rigged software to be replaced. VW says the new software won’t result in reduced fuel economy.

The first model to be recalled will be the Tiguan CUV, which accounts for about 20% of the 126,000 affected vehicles. Other models will be recalled for installation of the new software in stages.

The approved recall plan potentially saves VW Korea $4 billion or more, compared with the cost of replacing vehicles or providing buyers with full refunds on their purchases.

There are thousands of owner lawsuits demanding such adjustments, which apparently now have lost their teeth. The Barum Law firm in Korea, which represents more than 4,500 owners in individual lawsuits, has not commented on the VW recall plan.

Since the freezing of sales of affected vehicles in August, VW Korea’s sales have plunged drastically, and the decline is continuing. The importer sold just 30 vehicles in the entire month of October, an 83.7% drop from the tepid 184 units delivered in September. It sold 947 vehicles in October 2015.

Audi Korea also is suffering from the emissions-rigging scandal, with its sales off 80.9% last month to just 475 vehicles.

Still hanging fire is punitive action by Korea’s Fair Trade Commission, which has been investigating VW Korea for making false advertising claims regarding the emission ratings of its vehicles. It is not a trivial matter, as the FTC has said it is considering criminal charges against 10 current and former VW Korea officials and may levy fines that total up to $75 million.