South Korea today became the first country outside the US to punish Volkswagen on the basis of its own emissions tests, slapping the German automaker with a record fine and ordering a recall of 125,522 vehicles.
The South Korean environment ministry said it ordered Volkswagen Korea to submit a recall plan by January 6 2016.
This comes after the country's own testing showed Europe's biggest auto manufacturer manipulated devices that record diesel emissions in vehicles with older engines.
It also fined Volkswagen Korea 14.1 billion won ($12.31m), the steepest financial penalty imposed on an automaker in Asia's fourth-biggest economy, a decision that could scare some buyers off imported cars generally.
Officials said government testing of 15 other automakers' diesel models would be completed by April, creating an uncomfortable degree of uncertainty at a time of slowing sales for importers in the world's 11th-biggest car market.
Sales of diesel-powered German imports have been gaining share in a South Korean market long dominated by home-grown players led by Hyundai and Kia.
But the market share of imported vehicles fell from 15.7% in September to 12.34% in October, the lowest percentage since July 2013, according to the Korea Automobile Importers & Distributors Association.
Volkwagen sales fell from 2,901 registered vehicles in September to just 947 in October, the trade group said. Among imported brands, its market share fell from 14.2% in September to 5.4% in October.
Seoul decided to conduct its own tests on Volkswagen vehicles after the German giant admitted in September that it installed software in up to 11 million diesel vehicles worldwide that vastly understated their actual emissions of smog-causing nitrogen oxides.
