Mercedes-Benz plans to create a social responsibility fund in South Korea, where the top-selling German luxury car brand has often been criticized for being stingy in giving back to society.

“Most of the funding will come directly from each car they sell. The amount would be about 0.1 percent of the actual car price,” an industry source close to the matter said Monday on the condition of anonymity.

According to Korean officials, Mercedes-Benz Korea, along with two other local operations, Mercedes-Benz Financial and Daimler Truck, will announce the carmaker’s new CSR initiative, including more details of the fund, in the coming weeks. 

In 2013, Mercedes posted 1.4 trillion won ($1.37 billion) in sales and 42.4 billion won in operating profit in Korea, while the company spent a tiny 451 million won on CSR activities here, becoming the target of public criticism amid its soaring car sales.

The new CSR fund is part of the carmaker’s “Korea 2020” vision that was unveiled in November when Daimler Group chairman Dieter Zetsche visited Korea. At the time, the chairman pledged to double its annual car sales to some 40,000 vehicles by 2020 and ramp up efforts to expand investment and CSR activities in the market.

Mercedes’ archrival BMW has already begun the operation of a charity fund, called BMW Korea Future Fund, to support young Korean talents since July 2011.

BMW Korea, in particular, donates a combined 120,000 won on every new car purchase, with the buyer, the Korean unit, the dealership and the financial service company each contributing 30,000 won voluntarily.

BMW, the best-selling foreign car brand here, logged 1.9 trillion won in sales and 25.7 billion won in operating profit in 2013. The Korean unit, along with the Future Fund, donated 3.21 billion won, the largest amount by a foreign car brand.

With the industry’s top players revving up their CSR activities, other local units of foreign brands are expected to feel more pressure to follow suit.

Audi and Volkswagen, two hot-selling brands both owned by Volkswagen Group, donated just 210 million won last year, even though their combined operating profits, worth 40.8 billion won, outpaced those of BMW.

By Lee Ji-yoon (jylee@heraldcorp.com)