South Korea Levies $10 Million Fine on BMW, May File Criminal Charges

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The government of South Korea has fined German luxury carmaker BMW $9.93 million alleging that the company tried to cover up faulty parts related to some 50 incidents of spontaneous engine fires. According to the Yonhap News Agency, BMW knew about the problem in 2015 but a recall was not announced until August 2018.

BMW’s problems don’t end there. CNN reported Monday morning that the Ministry of Land, Infrastructure, and Transport is referring the case to prosecutors who will determine whether or not to file criminal charges against the automaker.

A government-led investigation determined that the exhaust gas recirculation (EGR) system was responsible for the fires. The EGR system redirects some exhaust gases back into the engine where its burned a second time in an effort to reduce pollution. In October, BMW began refitting a cooling device in the EGR system to prevent the fires.

The government panel concluded that BMW tried to hide the issue and dragged its feet in its recall of 172,000 vehicles. BMW countered that it issued a recall in July 2018 as soon as it had confirmed the cause of the fires. No deaths or injuries have been reported as a result of the fires.

In August, the government banned the vehicles from the country’s roads until they had been brought in, inspected, and repaired.

Through the first 11 months of 2018, BMW has sold fewer than 48,000 cars in South Korea, a decline of 9.9% year over year. BMW was the second-most popular imported car in the country in 2017, with total sales of 59,624, trailing only Mercedes-Benz which posted sales of 68,861.

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