South Korea Hits VW With Record Fine For Deceptive Emissions Ads

VW advertised its cars as environmentally friendly vehicles that met pollution standards although they were equipped with devices designed to deceive government tests, the Fair Trade Commission (FTC) said. The regulator said on Wednesday it will ask prosecutors to investigate VW's headquarters, its South Korean unit and five former and current executives including Andre Konsbruck, Vice President Sales Americas, Audi AG and Audi's Head of Sales Overseas Terence Bryce Johnsson.

It alleged Volkswagen made "false, exaggerated or deceptive" claims in the advertisements, and faces jail terms of up to two years or fines of up to 150 million won.

Audi Volkswagen Korea (AVK) said it had not been formally notified of the regulator's decision. The company said in a statement, "AVK is committed to rebuilding trust with the authorities and with customers and other stakeholders in Korea."

While South Korea has already suspended most of Volkswagen's sales since August, the fine reveals South Korea is not planning to relent its stance about the German carmaker's emissions cheating. It must be noted Volkswagen (South Korea) has already been fined 17.8 billion won for emissions-cheating, and one of its local executive arrested on accusations including fabrication of documents and violation of air quality laws.

The suspension of sales brought the German carmaker's growth in South Korea to a screeching halt. While the country is a relatively small market for VW, it is consequential for its luxury marques Audi and Bentley.