New fraud scandal in South-Korea threatens Audi
Car manufacturer Audi, part of the VW Group, is suspected of fraud in South-Korea, falsifying identification documents and chassis numbers to sell cars that aren’t complying with local environmental regulations.
In the wake of the dieselgate inquiry, still going on in Germany, the newspaper, Süddeutsche Zeitung, has had insight in documents explaining this new sort of fraud. In fact, every vehicle has an identification document referring to chassis number, engine number, gearbox number, etc.
This identity card of the car serves to identify the vehicle and Audi apparently has attached the same identification plates to several cars. According to the above mentioned documents, this fraud is going on since 2013 in the factories of Audi in Ingolstadt and Neckarsulm (Germany).
South-Korea is a country very sensitive to white collar crime. Dieselgate has been a great shock in this South-Asian country and the VW Group has already been severely punished for it. Once the fraud in the US was known, Korean justice has been searching the premises of Audi/Volkswagen Korea Ltd, the importing headquarters of the Group.
Mid-2016, the Korean government has inflicted a 13 million dollar fine on Audi/VW’s Korean daughter and the certifications for 126.000 Audi and VW cars were withdrawn. Later a second fine of 16 million dollar has been inflicted when fraud documents for homologation were found about emissions and noise production. Several Korean managers of the Korean Audi/VW still have to appear in court for this.
Audi in turmoil?
Meanwhile Audi and VW have been constrained to withdraw all their vehicles from the South-Korean market between mid-2016 and the beginning of 2018. That’s hard on a 2 million cars/year market, largely dominated by the South-Korean brands (Hyundai, Kia, Samsung) but with a big interest for European cars, especially premium ones.
The new scandal comes at a moment that Audi and VW were trying to have a quiet restart in this land of the morning calm and everybody is waiting now on how the South-Korean authorities will react. Additional questions can be asked: are there other players involved? Does the fraud limits itself to South-Korea? The same fraud mechanism has been rumoured about Audi on the Chinese market.
In Europe Audi sales dropped some 56% last month, reaching a staggering 70% minus in home country, Germany. In a reaction, Audi pointed to the WLTP emission rules transition, stipulating that sales in August were exceptionally high because many cars were still sold, according to the previous NEDC rulings.
In fact the very positive sales figures of August and the negative ones in September compensate each other. Audi’s interim CEO, Bram Schot, (CEO, Rupert Stadler, still in jail, has been ousted last week) said in a reaction that from now on practically all Audis are WLTP-tested and that he expected to sell the same amount of cars as in 2017.