Volkswagen encountered its first sales downfall by nearly 10% in October 2015 when the ‘cheat’ software scandal emerged. According to The Society of Motor Manufacturers and Traders (SMMT), VW sales have gone downhill from 15,495 in October last year to 13,970 vehicles last month. We will only be seeing more reduced sales unless VW will do something about it.
The first allegations begin by claiming that 3.0-litre diesel engines in a variety of current are fitted with software capping the nitrogen oxide (NOx) emissions during testing. But what’s worse is that it’s allowing a nine-times greater emission during ordinary driving as well as VW uncovering ‘irregularities’ during its measurement of the CO2 levels in around 800,000 VWs, another downside which would cost VW a fortune.
EA288 EU5 and EU6 engines free from defeat device
The only good news is that VW has issued a statement declaring EU5 and EU6 versions of the EA288 free from ‘improper defeat device’ software. However, VW is also taking necessary measures to see whether variants of these engines would comply with the regional emission requirements.
VW will now fast-track new clean tech
Volkswagen has also began to cut €1 billion a year from its R&D budget as they’re overcoming their emissions scandal. German authorities have also ordered for VW to recall 2.4 million cars and fix the affected ones.
The new austerity era in Wolfsburg has also affected Volkswagen in its most part. This is because VW’s Phaeton will have a fast-tracking hyper-clean diesel technology and it will also have a new scalable electric architecture to support a new generation of EVs.
The VW emissions crisis in the UK
UK boss Paul Willis has admitted that 400,000 British cars would need to be recalled in order to have them fixed out of their ‘defeat device’ emissions cheat software. He also mentioned that a third of the affected cars (1.6 TDI models mostly) would require a change to the fuel injection system.
‘Painful cuts on the way’
Global VW boss Matthias Mueller announced that the company would have more tough times ahead; starting with the diesel emissions scandal. In his own words: “It is not possible to quantify the commercial and financial implications at present… To be perfectly frank, this will not be a painless process.”
Mueller also emphasized that the company is doing everything they can in order to overcome this tough period of time, and that the production is still remaining in full swing. It would be compelling to see if sales gains continue in October this year.
Perspective of UK owners’ on emission scandal
It’s a huge sigh of relief for British owners as the government has officially announced that UK tax rates won’t change on Volkswagen, Audi, Skoda and Seat models, though they are affected by the scandal. The company will also write to all affected owners and have their cars rapidly fixed. Although VW has already suspended around 4000 cars for sale, according to pricing experts, they will still see a downhill of residual values and sales revenue.
Is my Volkswagen affected too?
According to the officials, affected cars would only be ‘refit’ and not ‘recalled’, and only UK owners could have their full-blown recalled car. Officials also claim that the elimination of the software would be free of charge, as long as owners bring their cars to the main dealer.
CEO of the VW car division has also stressed that they will do “everything humanely possible” in order to gain back the loss of trust from their customers. In my perspective, I think that their PR team is doing quite a good job in handling this crisis.
What’s happening so far?
It all started with the accusations from the US where they’ve uncovered 2.0-litre diesel engines in VW cars using what seems to be a ‘cheat cycle’. Since it has become a full-blown global scandal now (with an $18 billion fine imposed by Americans and the recall of nearly half a million vehicles in the US), read on to find out more about this fast-moving story:
• VW sales gone downhill by 10% in UK in October 2015
• 3.0-litre V6 TDI now included in the software scandal
• Authorities confirms no change for UK car tax if CO2 rises
• In the UK alone, there are 1.2 million affected cars
• Ex-CEO Martin Winterkorn resigns on 23rd September
• Porsche leader Matthias Mueller appointed as new CEO of Volkswagen AG
• More than €13 billion obliterated from VW’s market value
• VW delegates €6.5 billion to fix the #dieselgate scandal
What’s in Martin Winterkorn’s resignation statement?
As mentioned above, the boss resigned on the Wednesday 23rd of September 2015. He emphasized that he is utterly stunned by the delinquency of the scandal and how it has had a major effect on the company, and with the resignation he hopes for a fresh start for VW. In addition, he also stresses that transparency is very significant in order to regain the trust from owners globally.
Is Volkswagen in trouble now?
As the problem arose from US, they have the power to impose a fine as high as $37,500 per vehicle affected. The company will also face a setback as global domination would be an issue and since September marked the end of Winterkorn’s days, investigations about him are still ongoing.
The law that VW has ‘violated’
It all comes from the section 203 (a) (3) (B) of the Clean Air Act. According to that specific law, carmakers ‘are subject to a civil penalty of up to $3750 for each violation that occurred on or after 13 January 2009. Any manufacturer who, on or after that date sold any new vehicle is subject to a civil penalty of up to $37,500 for each violation.’ That’s one hell of a lot of money.
