[Newsmaker] Mercedes-Benz’ fast growth in Korea meets unexpected bump

Amid German prosecutors’ investigation into defeat devices installed in Mercedes-Benz diesel cars, the Environment Ministry here said Tuesday that some 110,000 units powered by the engines in question were sold in Korea.

The ministry started examining 110,000 units across 47 models running on engines codenamed OM642 and OM651, following a report by German newspaper Sueddeutsche Zeitung that said the number of concerned Mercedes-Benz cars totaled over a million units worldwide last week.

The German Federal Motor Transport Authority, or KBA that oversaw the faked emissions of Volkswagen Group is currently testing Daimler vehicles, according to the German transport ministry spokesman Ingo Strater.

The two engines are installed in most diesel-powered Mercedes-Benz vehicles, including the popular C-class and E-class sedans, with the exception of the New E-class cars released in June 2016.

Citing a search warrant issued by the Stuttgart local court, the news outlet reported last week that the German government was looking into whether the automaker had used defeat devices to manipulate emissions test results for over a million vehicles sold between 2008 and 2016.

The latest accusation surrounding the German automaker comes amid record breaking sales flagged by Mercedes-Benz Korea.

Mercedes-Benz Korea sold 7,783 units here last month, the best-ever monthly sales by a foreign carmaker here, data from the Korea Automobile Importers and Distributors Association showed.

Mercedes-Benz Korea also ranked No. 1 best-selling foreign carmaker in 2016, posting sales of 3.7 trillion won ($3.3 billion) and 114.3 billion won in operating profit.

Korea is the German automaker’s fifth-biggest market by sales, after China, the US, the EU and Germany, the company said.

“German prosecutors are currently carrying out investigations, so we are not sure of the technical details of how the automaker manipulated emissions tests,” said an official from the Environment Ministry.

If the accusations surrounding the automaker turn out to be true, the Korean government will revoke certifications, ban sales and recall affected vehicles as it did with Volkswagen vehicles, she added.

In 2015, German carmaker Volkswagen was dealt a blow due to revelations of falsified emissions readings using defect devices placed in some 11 million diesel vehicles sold worldwide.

Following the scandal, sales of Volkswagen Korea plummeted 50.9 percent on-year to 1.3 trillion won in 2016, according to corporate tracker CEO Score.

Among the top 500 companies operating in Korea, Volkswagen was 326th place last year compared to 179th spot the year earlier, said CEO Score.

“We cannot comment on the ongoing proceedings of the Stuttgart public prosecutor’s office. We will cooperate fully with the authorities,” said an official of Mercedes-Benz Korea.

The company added that it does not believe Mercedes-Benz cars will lose their certifications. 

By Kim Bo-gyung (lisakim425@heraldcorp.com)