Lawmakers grill foreign car execs

The chief executives of four foreign-brand cars here appeared at the National Assembly audit on Tuesday to answer questions on their trade practices.

It marked the first time that these top executives took part in the sessions for testimony.

The National Policy Committee had called on four CEOs: BMW Korea CEO Kim Hyo-joon, Mercedes-Benz Korea CEO Britta Seeger, Ford Korea CEO Jung Jae-hee who is doubling as chairman of the Korea Automobile Importers and Distributors Association, and C.S. Lim, chairman of Han Sung Motor, the largest distributor of Benz cars.

During the unprecedented scrutiny into foreign-based carmakers doing business in Korea, lawmakers alleged that the top-selling brands have been involved in unfair business practices.

Rep. Min Byung-doo of the main opposition Democratic United Party claimed that BMW and Mercedes-Benz sought excessive profits by charging customers more for leases.

According to Min, when customers purchase cars using the carmaker’s own lease programs, Mercedes-Benz and BMW buyers paid up to 3.73 million won ($3,500) and 5.66 million won more, respectively, than when using non-affiliated financing programs.

Considering their annual car sales, the lawmaker said the two German brands may have garnered extra profit worth a combined 111.94 billion won ― 72.44 billion for BMW and 39.5 billion won for Mercedes-Benz.

“All our dealers allow customers to choose their preferred financing programs. The final decision is totally up to customers,” said Kim, the BMW Korea chief.

Min also pointed out that the KAIDA members met regularly to share sales data and new launch information through a so-called “Sales Committee.” Jung, the KAIDA chairman, admitted that they sometimes adjust the launching dates for their new cars but said the meetings were not for business purposes.

The first audit into foreign-based carmakers comes as they are gaining renewed spotlight amid soaring sales. During the first nine months of this year, a cumulative 116,668 foreign-brand cars were sold to reflect a 21.3 percent growth from the same period last year.

By Lee Ji-yoon (jylee@heraldcorp.com)