The government revoked certs for 80 model variants of VW, Audi and Bentley vehicles, and fined Volkswagen 17.8bn won (€14.3m) for allegedly forging documents on emissions or noise-level tests.
The move could slam the brakes on sales for Europe’s biggest carmaker in the Asian market, where its local unit had more than tripled revenue to 2.82tn won over the past five years before becoming mired in the emissions scandal.
Volkswagen said it would consider a legal challenge.
In all, 209,000 VW vehicles have been de-certified in South Korea, since November — or 68% of the vehicles the carmaker had sold in the country since 2007, the environment ministry said.
While South Korea is a relatively small market for Volkswagen, it is a major market for its luxury marques Audi and Bentley and one of the fastest-growing markets for all brands.
Any delay in recalls previously ordered over emissions test manipulation could be met with an order for VW to exchange those vehicles for other models, the government said.
In a letter to customers on its South Korean homepage, Volkswagen said it would consider requesting an “injunction of execution”.
An investigation in Japan said poor communication, slack governance and pressure on resource-starved engineers to improve fuel efficiency at Mitsubishi Motors were at the root of its mileage-cheating scandal.
Investigators hired by Mitsubishi after the carmaker admitted in April to overstating the fuel economy on its mini-vehicles criticised the firm for “not having the manufacturing philosophy of an automaker”.