South Korea suspends sales of most Volkswagen models

Tue Aug 2, 2016 4:29am EDT
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By Hyunjoo Jin

SEOUL (Reuters) - South Korea on Tuesday suspended sales of most Volkswagen AG (VOWG_p.DE: Quote) models in a fresh blow to the German automaker as it struggles to overcome the global repercussions of its emissions-test cheating scandal and rebuild its tattered image.

The government revoked certification for 80 model variants of VW, Audi and Bentley vehicles, and fined Volkswagen 17.8 billion won ($16.06 million) for allegedly forging documents on emissions or noise-level tests.

The move could slam the brakes on sales for Europe's biggest automaker in the Asian market, where its local unit had more than tripled revenue to 2.82 trillion won over the past five years before becoming mired in the emissions scandal.

Volkswagen described the ruling as "most severe" and said it would consider a legal challenge.

In all, 209,000 VW vehicles have been de-certified in South Korea, mainly over emissions-related problems, since November - or 68 percent of the vehicles the automaker had sold in the country since 2007, the environment ministry said.

While South Korea is a relatively small market for Volkswagen, it is a major market for its luxury marques Audi and Bentley and one of the fastest-growing markets for all brands.

It could take more than three months for the affected brands to be back on showroom floors, officials said.

"It usually takes three months for vehicle certification, but this may take longer for Volkswagen, as we will take thorough steps," environment ministry director Hong Dong-gon told reporters.   Continued...

Volkswagen cars are parked at a dealership in Seoul, South Korea, August 2, 2016.  REUTERS/Kim Hong-Ji