SEOUL (Reuters) – South Korea’s transport ministry said it would file a complaint against German luxury carmaker BMW (BMWG.DE) with prosecutors for allegedly delaying recalls and concealing defects that led to several engine fires in the country this year.
The BMW logo is seen on a vehicle at the New York Auto Show in the Manhattan borough of New York City, New York, U.S., March 29, 2018. REUTERS/Shannon Stapleton
The ministry also fined BMW 11.2 billion won ($9.96 million) over “delayed recalls”.
A faulty exhaust treatment system in BMW diesel cars caused 52 vehicle fires in South Korea as of end-November, prompting the company to recall 172,080 models and issue an apology.
The government said an investigation showed that a faulty design in BMW’s Exhaust Gas Recirculation (EGR) unit sparked the fires, adding it will decide whether to order more recalls.
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BMW denied design defects and said it recalled models in a timely manner.
“We embarked on recall measures without hesitation at the time when the root cause of fires was confirmed,” BMW’s Korean unit said in statement on Monday.
BMW said it first acknowledged in July this year the faulty EGR system causing fires, but the government said BMW was aware of the problem since 2015 when it created a task force to address the issue.
BMW announced the recall of 106,317 vehicles in July, but the automaker did not recall an additional 65,763 vehicles that use the same engines until October, the government said.
The rate of BMW vehicles catching fires was 0.14 percent in South Korea, similar to 0.19 percent in Germany and 0.17 percent in the United Kingdom, and lower than those in the United States and China, South Korea said.
BMW’s South Korean sales fell nearly 10 percent to 47,569 vehicles from January to November from a year earlier. This compared with the imported car market’s 13 percent growth and Hyundai Motor’s (005380.KS) 3 percent sales gain.
BMW is the second-biggest imported car maker after Mercedes Benz (DAIGn.DE) in South Korea.
German automakers have in recent years achieved breakneck sales growth in South Korea, long dominated by Hyundai, fueled by their strength in fuel-efficient diesel vehicles and the country’s free trade deal with the European Union and the United States.
Reporting by Hyunjoo Jin; Editing by Himani Sarkar