Questions left by the Busan tunnel car fire… Global companies’ responsibility for the Korean market and ESG [Better economy, SDGs]

Mercedes-Benz Group CEO Ola Källenius, who visited Korea on the 20th of last month, signed a contract with Samsung SDI in Seoul to supply high-nickel batteries for next-generation electric vehicle platforms, and also reaffirmed the battery and display cooperation relationship with LG Group. It was his first visit to Korea in about five months after the future strategy meeting held in Yeongjong Island, Incheon in November last year. At that time, Mercedes-Benz highly evaluated the technological prowess and cooperation potential of Korean companies and emphasized its will to expand strategic cooperation with the market.

In fact, Korea is evaluated as one of Mercedes-Benz’s major global markets. Several automobile and economic media outlets have analyzed that Mercedes-Benz is using Korea as a strategic market to demonstrate its brand status and technological prowess, rather than simply as a sales base. The recent unveiling of the new ‘C Class’ electric vehicle in Seoul for the first time in the world is also interpreted as an extension of this trend. There is also analysis in the industry that this is a measure to restore consumer confidence that was shaken after the Cheongna electric car fire in Incheon and strengthen the competitiveness of electrification.

Contrary to this external message, the recent fire accident that occurred in Busan is once again raising questions about the consumer protection responsibilities of global automakers and the domestic automobile safety management system as a whole.

At approximately 1:15 p.m. on March 8, an accident occurred in which a 2024 Mercedes-Benz ‘C300’ vehicle, which was driving inside the Jangsan 2 Tunnel in Haeundae-gu, Busan, was engulfed in flames immediately after stopping. According to the vehicle owner, just before the accident, there was a strong smell of oil inside and outside the vehicle, and the engine warning light came on and symptoms of a decrease in power output were observed, such as not accelerating properly even when the accelerator pedal was pressed.

It is known that the owner of the car reported these abnormal symptoms in a phone call with a representative of the Mercedes-Benz official service center about 4 minutes before the fire occurred. Afterwards, the vehicle rapidly lost speed and stopped inside the tunnel, and flames broke out in front of the passenger side bonnet. The driver immediately evacuated the vehicle and called 119, and firefighters and police arrived to extinguish the fire. Fortunately, no casualties occurred, but the vehicle was reportedly scrapped. Some point out that since the accident occurred inside a tunnel, it was difficult to rule out the possibility that it would lead to a major casualty accident depending on the circumstances.

The reason this accident is attracting attention is because the engine warning light and symptoms of power abnormality continued repeatedly for several months before the fire. According to the owner’s explanation, the vehicle in question was brought to the official service center three times for repairs before the fire broke out, and the final delivery date was the day before the fire. Some media reports also claimed that the test drive video at the service center contained a scene presumed to increase RPM (revolutions per minute) and decrease output while driving on a hill. The purchase price of the vehicle is known to be around 68.8 million won.

After the accident, the Busan fire department and Mercedes-Benz Korea each conducted an investigation into the cause. In a report, the Busan fire department determined that “electrical causes cannot be completely ruled out, and considering the engine warning light on, repeated maintenance history, and the circumstances of the decline in output just before the fire, etc., the possibility that the fire occurred due to an unknown cause in the engine’s mechanical causes or electronic equipment cannot be ruled out.” On the other hand, Mercedes-Benz Korea stated that “no direct technical defects that could cause an accident were found in the vehicle system,” and mentioned the possibility of a fire due to external factors.

It was reported that the car owner later filed a complaint for professional negligence causing injury to Mercedes-Benz Korea and its official dealer at the Haeundae Police Station in Busan. It is said that during the compensation negotiation process, an explanation was delivered to the effect that additional compensation could be linked to the double compensation issue as the vehicle owner was compensated for part of the vehicle value through his/her own vehicle insurance. It is known that there are differences in the positions of both sides regarding compensation for psychological damage.

Car fire accidents are an area in which it is difficult to determine the cause. In fact, many vehicle fire accidents are concluded with ‘unknown cause’ or ‘unknown cause’, and manufacturers are also generally cautious about admitting liability unless a direct defect is confirmed. However, in major global automobile markets, there are cases where preventive recalls, free inspections, and consumer guidance measures are relatively actively implemented not only after defects are finalized but also when the possibility of fire risk is confirmed to be above a certain level.

The U.S. National Highway Traffic Safety Administration (NHTSA) has previously been carrying out a step-by-step recall process in relation to the possibility of battery fire hazards in the Mercedes-Benz ‘EQB’ model, and measures to replace the batteries themselves free of charge have been implemented for some vehicles this year. In the United States, vehicle owners were informed of charging restrictions and recommendations for outdoor parking. This is a measure to prevent potential fire risks even before the exact cause has been determined.

Even in Korea, Mercedes-Benz fires and consumer safety issues have repeatedly received social attention. The ‘EQE’ fire, which occurred in the underground parking lot of an apartment complex in Cheongna, Incheon in August 2024, led to damage to hundreds of vehicles and extensive power and water outage damage in the complex, causing great social controversy. Afterwards, compensation talks with some of the affected residents continued for a long time, and there were also reports that some apartment residents held a protest near the Mercedes-Benz event venue. The Fair Trade Commission conducted an investigation into Mercedes-Benz Korea’s labeling and advertising issues related to electric vehicle batteries and decided to impose a fine along with a corrective order in March.

Of course, the Cheongna EQE fire and the Busan C300 fire are separate cases with different types of vehicles and causes of accidents. However, as car fires and consumer trust issues have repeatedly developed into social controversies, some say that this incident also needs to be examined from a more comprehensive perspective beyond simple individual disputes.

Korea is an important market for Mercedes-Benz. Domestic consumers’ brand loyalty is high enough that sales of the ‘E Class’ have surpassed those of its home country of Germany, and Mercedes-Benz Korea’s annual sales were announced to be around KRW 5.7 trillion in 2024 after recording the highest ever performance at approximately KRW 7.9 trillion in 2023. Successive CEO visits to Korea in 2025 and 2026 and the world premiere of a new car in Seoul are also seen as signs that the headquarters is evaluating the Korean market as strategically important.

It is also natural that after an accident occurs, there are demands that the cause be identified and consumer protection be carried out at the level of a global brand. In particular, in situations where repeated abnormal symptoms and the possibility of fire risk have been raised, there are many opinions that more active and transparent explanations and cooperation in investigations are necessary. As the gap between expectations and follow-up response increases, some analysts say that restoring brand trust is more likely to depend on the actual incident response process rather than marketing.

The government’s policy direction is also attracting attention. Recently, discussions have continued in the government and National Assembly to improve the consumer protection system, such as strengthening the damage relief system, revitalizing group dispute mediation, and expanding punitive damages. There is an assessment that issues with suspected defects that are directly linked to the possibility of casualties, such as car fires, are not unrelated to this policy stance.

It is reported that this C300 fire accident has been transferred to related organizations such as the Ministry of Land, Infrastructure and Transport, the Korea Transportation Safety Authority’s Automobile Safety Research Institute, and the Korea Consumer Agency through Kookmin Shinmungo, and related procedures are in progress. However, limitations have been continuously pointed out that under the current system, automobile fire accidents do not easily lead to mandatory corrective measures or recalls unless repeated cases of the same vehicle model are accumulated or structural defects are not sufficiently proven.

The so-called ‘Korean Lemon Law (automobile exchange/refund arbitration system)’ of the Automobile Management Act also has limitations in timing and scope, making it difficult to apply if symptoms of suspected defects become serious after a considerable period of time has passed after shipment. In particular, opinions have been consistently raised by some in academia and civil society that there is a need to more elaborately supplement the standards for launching defect investigations and the manufacturer’s data cooperation system in cases where a vehicle is completely destroyed by fire or there is a risk of casualties.

Recently, as car fire issues have been recurring, including electric vehicles and internal combustion engine vehicles, there are voices calling for a closer inspection of the manufacturer response system, consumer protection devices, and defect investigation capabilities at the level of the Ministry of Land, Infrastructure and Transport and the Land, Infrastructure and Transport Committee of the National Assembly. The opinion that we should approach it from a preventive perspective rather than supplementing the system after a loss of life has occurred is also gaining persuasion.

ESG (Environment, Society, Governance) and sustainability are also not completed by simply selling eco-friendly vehicles or electrification strategies. Product safety, consumer protection, responsible response after an accident, and securing trust in the overall supply chain and service system are also key elements of sustainable management. GRI (Global Reporting Initiative) I, an international sustainability management disclosure standard, also covers product safety and consumer health and safety impacts as one of the major disclosure areas. This is especially true in fields that are directly related to people’s lives, such as the automobile industry.

The final cause of the Busan Jangsan Tunnel 2 fire accident has not yet been determined. However, considering the repeated ‘warning signals’ and maintenance history, the nature of the accident as a fire inside a tunnel, and the recent social interest in car fires and consumer safety issues, it is clear that this is a case that makes us look at the overall consumer and car management system beyond a simple civil dispute. This is why some point out that both Mercedes-Benz, which has emphasized the importance of the Korean market, and domestic relevant organizations need to use this incident as an opportunity to examine a more responsible consumer protection and safety management system.

Jeong-Hoon Kim, Representative of UN SDGs Association unsdgs@gmail.com

*CEO Kim is currently serving as an ombudsman at the Financial Supervisory Service, a market member at the Korea Stock Exchange (KOSPI), and a senior collaborative research fellow at the United Nations Research Institute for Social Development (UNRISD).

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