“Anxiety over certification” is spreading throughout the imported car industry in Korea. The Volkswagen's diesel gate toughened the certification of diesel vehicles. This time, imported car companies are having trouble launching eco-friendly cars.
Import car companies have not focused on launching diesel vehicles since last year. As the government’s verification of documents became stricter, it takes a lot of time for imported car companies to have their diesel models certified. "After seeing the launch of diesel vehicles by US and Japanese companies delayed by more than a year, we changed our sales strategy and received the certification of non-diesel models first," a company official said. This fact pulled down sales of diesel vehicles 21.7% year-on-year from January to June this year.
However, imported car companies are complaining, saying that the certification of eco-friendly cars as well as diesel cars virtually stopped. This is because certificates is not being issued, let alone becoming tougher. A typical case is PHEV models, which can be charged like electric cars while using internal combustion engines and motors. Although they are called the most realistic eco-friendly model, there are few PHEV models sold in the market. Mercedes-Benz, BMW and Porsche intended to introduce the PHEV models. However, nobody knows when the models will be certified. Toyota's Prius Prime and Volvo's XC90 T8 are recording sluggish sales as the launch of new PHEV models is being discontinued.
The imported car industry argues that there is a need to improve the government's certification system. Fuel efficiency is certified by the Ministry of Industry and Commerce, and noise and emissions by the Ministry of Environment. The Ministry of Land, Infrastructure and Transport handles post-certification management. Imported car companies face a lot of troubles as they have to deal with several agencies at the same time. There are many test institutes such as the Korea Institute of Energy Research, the Korea Automotive Technology Institute, and the Korea Petroleum Quality & Distribution Authority for fuel efficiency certification of internal combustion engines. However, eco-friendly cars such as PHEVs are checked by the Korea Petroleum Quality & Distribution Authority only. The Korea Petroleum Quality & Distribution Authority suffers from a lack of human resources and equipment in managing 17 foreign car importers.
Industry insiders point out that a delay in certification can be misunderstood as a non-tariff barrier by countries with free trade agreements (FTAs). A company official said, "The fact that domestic automobiles are already on sale but delayed certification blocks the sale of import cars can be interpreted as a discriminatory act."