Thursday, 22 August 2019

South Korea fines BMW 11.2b won for engine fires

Reuters

SEOUL : South Korea’s transportation ministry fined BMW 11.2 billion won (US$9.93 million) for allegedly trying to hide faulty parts and belatedly recalling its vehicles after some engines caught fire. About 40 engines of BMW vehicles caught fire earlier this year, prompting the German luxury carmaker to recall some 100,000 vehicles in August.

An investigative panel made up of civilian experts and government officials found that the fires were caused by faulty parts in the exhaust gas recirculation (EGR) system, the Ministry of Land, Infrastructure and Transport said in a statement.

The ministry ordered BMW to replace all EGR systems in the recalled vehicles and to conduct further checks on the durability of the EGR system, according to the statement. The ministry referred the case to prosecutors for criminal investigation, the statement said. A coolant leak and defective valves in the EGR system caused the engine fires, the ministry said.

The ministry criticized BMW’s headquarters in Germany for having known in 2015 about the faulty parts in the EGR system.

In October of that year, BMW’s headquarters set up a task force to refit a cooling device in the EGR system to prevent fires, the ministry pointed out.

BMW, on the other hand, had insisted it learned of the EGR system problem associated with the engine fires only in July this year, according to the ministry.

Hit by the engine fire controversy, the German carmaker saw its sales slip 9.9 percent in South Korea .

In the first 11 months of the year, the company sold 47,569 vehicles in South Korea , compared with 52,817 vehicles sold for the same period last year, according to industry data.

Although BMW recalled some 100,000 vehicles in July, the carmaker did not recall more than 65,000 vehicles that use engines with the same EGR system until October, the ministry pointed out.

In a statement, BMW’s Korean unit said the outcome of the investigation is in line with the company’s findings that the fires were caused by a coolant leak in the EGR system.

BMW said it will recall the affected vehicles in a timely manner, adding that it has been cooperating with the official investigation.

The carmaker again apologized for the engine fires, but it refrained from making any mention of the ministry’s accusation that it tried to cover up technical problems in the EGR system.

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