April 20, 2024

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[THE INVESTOR] The South Korean government is likely to reject Audi Volkswagen Korea’s recall plan again, affecting 125,000 diesel cars fitted with emissions-rigging software, according to local media outlet Money Today on Jan. 4.

The Ministry of Environment is planning to announce its decision on the recall plan submitted by the Korean unit of the German automaker next week, according to an unnamed official cited in the report. But the ministry will most likely dismiss the request as the automaker failed to come up with an adequate plan to secure maximum recall rate. 

Earlier in October, Audi Volkswagen Korea submitted its fourth recall plan to the ministry, following its three failed attempts in January, March and June, due to insufficient data and for not admitting to the use of cheat software device.

In its latest plan the company has admitted it fabricated the emissions test.

In December, however, the ministry asked for two additional documents from the automaker. It requested VW Korea to come up with plans to secure 85 percent of recall rate within 18 months after the initial order and to verify the technological problems regarding the fuel pressure of the vehicles.

In December, the Korean unit announced a 270 billion won (US$224.28 million) compensation package for customers affected by the scandal, hoping to calm them and the government authorities. But the industry watchers say VW’s latest compensation falls short compared to other countries in terms of the amount and benefits, failing to appease the ministry officials to OK the VW’s stalled recall plan.

This means Audi Volkswagen Korea has to submit another fresh plan for its recall to go through.

By Ahn Sung-mi (sahn@heraldcorp.com)