The government of The Republic of Korea (South Korea)has levied a $9.33 million fine on German luxury automaker BMW. The charge is alleging negligent workmanship and an effort to cover-up the cause of over 50 incidents of engine fires that popped up spontaneously. According to Yonhap News, BMW was aware that faulty parts were contributing to the fires as early as 2015. However, a recall wasn’t announced until at least August of 2018.
As problematic as this may be for BMW, their problems in South Korea don’t end here. CNN reports that the Ministry of Land, Infrastructure, and Transport is planning to refer the case against BMW to prosecutors. They will determine whether criminal charges against the carmaker are appropriate.
A Korean government-led investigation into the fires determined that the EGR (exhaust gas recirculation) system was the culprit in the fires. The EGR is the system that redirects some exhaust gas back to the engine where it is burned for a second time. This whole, complicated, system is an effort to reduce exhaust-caused air pollution. Three months ago, BMW began to retro-fit a cooling device into the EGR system that should prevent fires.
What have we learned from scandals in the past?
That the cover-up is usually worse than the crime itself. So it may turn out to be the case in this instance. The South Korean government panel found that BMW attempted to hide the inflammatory issue and dragged its collective feet in its recalling of about 172,000 vehicles. BMW answered the charge with a statement that said, in part: “We issued a recall in July 2018 as soon as we confirmed the cause of the fires. No injuries have been reported as a result of the fires.”
The government’s trust level of BMW is at an all-time low, resulting in the following measures. Beginning in August 2018, BMWs were banned from South Korean roadways. This measure will continue until the cars are deemed repaired by certified auto mechanics. To pass, they must be tested at a private facility, away from other cars.
Through November of 2018, BMW sold fewer than 49,000 cars in South Korea. That’s a decline of 9.9% compared to the reported sales numbers for 2017 through November, when BMW was the second-most popular imported car in South Korea. Only Mercedes-Benz bested BMW at that time. Gildshire will follow the story as it develops.