Carmakers in South Korea that cover up or scale down vehicle manufacturing defects and delay recalls will be slapped with penalties amounting up to 3 percent of their sales, the government said on Thursday.

According to new vehicle recall response system announced by the Ministry of Land, Infrastructure, and Transport, the government will slap penalties on automakers if they try to conceal defects. They will be fined up to 3 percent of sales of an affected model. Damages can be filed up to five times the losses from proven vehicle defects, up from current three times.

Currently, carmakers are slapped with 100 million won ($88,922) in fine or faced with a sentence of no more than 10 years if they hide or underreport manufacturing defects. Recall grounds also became more specific. Recall will take place if accidents occur from design or assembly problems or lead to serious casualty or death.

The latest measures come as BMW took slow actions even after a series of fires in cars sold in Korea. The government has also been criticized for failing to play its role on imposing sanctions despite growing concerns among BMW drivers. The German automaker blamed faults with exhaust gas recirculation (EGR) module as the main cause of fire. The government has formed an investigation team consisting private and public officials to look into the incident.

Meanwhile, sales of BMW 520d model that has been included in the list of recall for catching fires plunged almost 80 percent in August in Korea, losing its name as a best-selling model.

According to Korea Automobile Manufacturers Association on Thursday, only 107 BMW 520d vehicles were newly registered in August, down 79.5 percent from 523 units in July. The model was a top seller among imported vehicles in May and June before incidents involving fires became an issue. Sales of BMW 520d model reached 1,239 units in May and 963 units in June.

In July, however, sales almost halved from a month ago, ranking as the fifth best-selling import car in Korea. In the following month, the model failed to get its name on the top 10 list by sales.

By Kang Young-woon and Lee Eun-joo

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