Carmakers Face Heavier Fines for Covering up Defects
09 September, 2018
Automakers will be slapped with a hefty fine equivalent to three percent of their sales if they cover up or downplay defects in their cars.
The Ministry of Land, Infrastructure and Transport made the decision in a meeting chaired by Prime Minister Lee Nak-yon on Thursday, spurred by a series of unexplained fires in BMW engines.
The fine is being increased from the current one percent of sales. That means BMW could face fines of up to W195 billion or three percent of its 2017 sales of W3.63 trillion if it is found to have intentionally delayed the recall of its cars here (US$1=W1,122).
Carmakers also have to compensate customers to the tune of five to 10 times the price of a defective car if they have an accident and the manufacturer has not acted despite knowing about the defects, up from three times.