VOW Volkswagen AG

By Kwanwoo Jun

South Korea's government is set to fine two of German car maker Volkswagen AG's (VOW.XE) local subsidiaries after finding that anti-emissions software in over 10,000 of their cars was illegally manipulated.

Audi Volkswagen Korea and Porsche Korea face a total of nearly 12 billion won ($9.9 million) in potential fines.

Audi Volkswagen Korea could be penalized up to KRW7.90 billion and Porsche Korea KRW4.00 billion, and both will be criminally charged and ordered to fix the defects, according to a statement from the environment ministry on Tuesday.

Effective from Wednesday, the certifications for eight diesel-powered models that were found to contain the illegally manipulated software will be revoked, the ministry said. The revocations apply to 10,261 units imported or sold in the country since 2014, it said.

At the core of the issue is software related to AdBlue, a fluid injected into a car's exhaust system to neutralize harmful nitrogen oxides, the ministry said. The software was illegally programmed to reduce the amount of the liquid sprayed into the system when it runs out, allowing for 10 times more polluting gases to be released into the air than usual, it said.

Volkswagen, the world's largest car maker by sales, has spent nearly four years trying to put its diesel scandal behind it after admitting in 2015 to having rigged some 11 million vehicles worldwide with software that allowed them to dodge emissions tests. Since then, the company and its subsidiaries have had to pay more than $25 billion in fines and settlement costs.

The models that are set to have their certifications revoked in South Korea are the Audi A6 40 TDI Quattro, two Audi A6 50 TDI Quattro models, two Audi A7 50 TDI Quattro models, Volkswagen Touareg V6 3.0 TDI BMT, Volkswagen's Touareg 3.0 TDI 4 Motion and the Porsche Cayenne.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

August 20, 2019 07:28 ET (11:28 GMT)

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