Volkswagen Halts Sales of its Several Vehicles in South Korea

Germany: Ahead of the move taken by Environment Ministry, leading car manufacturer Volkswagen halts sales of its several models in the country from July 25 owing to their false emission tests.

Volkswagen, in order to regain their lost image is ceasing the sale of faulty vehicles in the country after they agreed on cheating US diesel emission tests and claimed to have around 11 million vehicles across the world to be fitted with illegitimate software. Other than this, the company has allocated a budget of USD17.85 billion to shelter the cost of this scandal.

The company has been struggling in terms of sale of their vehicles in the country which is Asia’s second largest diesel car market. The sales of Volkswagen cars suffered a slump in the first half of 2016 to reach at 12,463 units, thereby registering a decline of 33% compared to last year. As per the statistics shared by Korea Automobile Importers and Distributors Association, Volkswagen’s top selling models were Tiguan 2.0 TDI BlueMotion with a figure of 9,467 vehicles followed by Audi A6 TDI with 7,049 units this year.

According to a recent report published by TechSci Research, “South Korea Tyre Market Forecast & Opportunities, 2020”, the tire market in South Korea is forecast to reach around USD5 billion in 2017. Growing vehicle exports, increasing adoption of electric vehicles and favourable government initiatives are expected to propel the market over the next five years. With a majority share in South Korea’s tire market, the passenger car tire segment is the most dominant tire segment in the country’s tire market. Since major global automobile manufacturers like Hyundai, General Motors, Renault Samsung, Daelim and Doosan have a significant presence in South Korea, the demand for tires from the OEM segment exceeds replacement sales. The country is an attractive investment destination for leading global players operating in diverse industry segments including automobile and allied industries.

TechSci Research believes that, due to halt on sales of Volkswagen vehicles in the country, the automotive market in South Korea is expected to witness an era of uncertainty, which is anticipated to impede the growth of country’s tire market.