The Korea government has decided to make Mercedes-Benz Korea face a prosecution investigation for selling unregistered vehicles. It has suspended the sale of Mercedes-Benz's four S350 diesel models until the end of April after the carmaker was found to have sold the vehicles with a nine-speed transmission without registering them with the authorities.
Under the current law, all carmakers are required to register all vehicles sold here with the transport ministry. Violators could face a prosecution investigation, a maximum one-year prison sentence, or a 10 million won (US$8,326) fine. The Ministry of Land, Infrastructure and Transport (MOLIT), the Ministry of Environment (MOE) and the Ministry of Trade, Industry and Energy (MOTIE) have decided to take strong action against Mercedes-Benz Korea to prevent a recurrence as there have been no such cases in the past.
A government official said, “The key of the matter is whether Mercedes-Benz Korea had intention to sell the vehicles without registering them. It will be found out during the prosecution investigation and the automaker can face additional penalties when there are additional charges.”
However, the government has shown reservations about the recall of 98 cars that were already sold. The official added, “Although the cars equipped with an unregistered transmission are illegal vehicles, the government will not order the automaker to recall them for now considering customers’ inconvenience and other problems that can occur in the process of recall. Instead, we believe that Mercedes-Benz Korea are coming up with various measures for customers, including financial compensation.” In this regard, a Mercedes-Benz Korea spokesperson said, “The company needs to go through administrative procedures, such as the correction of related information on registration, and we are discussing follow-up measures with ministry officials.”
Mercedes-Benz Korea started selling its full-size S350 sedan models with a nine-speed transmission without registering from January this year. The previous models used to have a seven-speed transmission. Under the law, all automakers are required to register all vehicles sold in Korea with the authorities if there are changes in vehicles’ data and performance. However, Mercedes-Benz Korea omitted the process. The carmaker was also criticized for fooling customers as it provided them with the registration card that says a car with a seven-speed transmission instead of a nine-speed transmission. Accordingly, the MOLIT has suspended the sale of Mercedes-Benz's four controversial S-Class models, including S350 d, S350 d 4Matic, S350 d L and S350 d 4Matic L, on February 29 until the car maker completes its internal self-certification.
Mercedes-Benz Korea is currently going through the self-certification process of its S350 models with a nine-speed transmission. The process is likely to end as early as the end of April. A government official said, “It takes a long time to complete vehicles’ fuel efficiency and emission qualification processes managed by the MOE. The process will finish as early as the end of April and the ministry will lift the suspension of sale after that.”
Due to the sale suspension for the S350 models, Mercedes-Benz Korea sold a total of 287 S-Class models, down a whopping 55 percent from 642 units in February last year.