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South Korea sales blow not only issue for VW

Tuesday, August 02, 2016 - 01:34

After South Korea suspends sales of most Volkswagen models, Sonia Legg asks what the decision means for the German automaker as it struggles to overcome the global repercussions of its emissions-test cheating scandal and rebuild its tattered image.

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VW called it "most severe" and is considering a legal challenge. But the decision by South Korea to suspend sales of most Volkswagen models will certainly put the brakes on the auto maker's Asian market. The decision came with a $16 million fine too. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "South Korea is a fairly important market for it. In fact, of the 80 models affected, along with the fine, that's actually 200,000 cars." It's the US where VW is fighting the biggest legal battles over the emissions scandal. And it's on the attack. It's just submitted a motion to dismiss a multi-district litigation case, arguing it fails to prove that former Chief Executive Martin Winterkorn and current brand chief Herbert Diess were directly involved in the preparation of "allegedly misleading statements" But that's not all, according to one analyst in Frankfurt... (SOUNDBITE) (German) CAPITAL MARKETS STRATEGIST, OLIVER ROTH, SAYING: "The big problem in the U.S. is the threat of a civil lawsuit over a violation of bond trading laws. This is really giving VW shareholders a big headache and could become a massive problem." It all means VW's road to recovery is a long one. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "The comparisons continue to be made between VW and what has finally ended for BP. That has taken a number of years, around six years for the ramifications to become clear, for the court cases to be finished and the fines to be paid." There was one crumb of comfort for VW - even in Asia.

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South Korea sales blow not only issue for VW

Tuesday, August 02, 2016 - 01:34