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.