Volkswagen ‘Dieselgate’ Shifts To More Markets And VW Personnel

You’ve no doubt heard by now about Dieselgate – the emissions fraud scandal that has embroiled Volkswagen and threatens to do lasting damage to the German automaker.

Sparked by an investigation of its EA189 diesel engines in the United States, the scandal has seen the US EPA apply fines to the company. The fallout continues, and will probably continue for some time.

The first moves came from now ex-CEO Martin Winterkorn, who publicly apologised to Volkswagen’s customers before falling on his sword a few days later by resigning.

There are more questions than answers at present, but with Winterkorn now gone the spotlight shifts to others in the Volkswagen Group – along with other carmakers around the world.

MORE RESIGNATIONS?

Reports out of Europe suggest Winterkorn will shortly be followed by Audi R&D boss Ulrich Hackenberg, Volkswagen brand development boss Heinz-Jakob Neusser and Wolfgang Hatz from Porsche out the company’s back door.

Hatz has served as the boss of Volkswagen’s engine and transmission development, Hackenberg is a long-serving member on the board and Neusser has headed the overall development program since 2013.

Reuters reports current Skoda CEO Winfried Vahland may be moved to a new board position devoted to repairing Volkswagen’s image in the US market, while Christian Klinger’s position as head of sales and marketing is also said to be under threat.

Following a meeting of the Group’s Executive Committee, Volkswagen reportedly said it was open to pursuing criminal proceedings against persons found responsible for the defeat device software.

Martin Winterkorn

Martin Winterkorn

Mr Winterkorn said his resignation would clear the way for a “fresh start” for Volkswagen, but stressed he had in no way been responsible for, or aware of, underhanded tactics for emissions testing in the US.

Berthold Huber is currently serving as interim chairman, and he thanked Mr Winterkorn for his service to Volkswagen over the last decade.

A decision is yet to be made on who will succeed Winterkorn as Volkswagen Group CEO.

OTHER MARKETS ALSO AFFECTED?

While it is now clear that Volkswagen and Audi diesel models equipped with the EA189 engine in the US have been cheating the system for emissions testing, the focus now shifts to Volkswagen’s countless other markets around the world.

The first is its home market of Germany along with the European Union as a whole, and Germany’s Transport Minister Alexander Dobrindt said this week that the carmaker is believed to have sold models in Europe with the same defeat device software.

The figure of 11 million Volkswagen products that are potentially affected worldwide has now been firmly established, which includes 482,000 in the US and an as-yet undisclosed number in Australia.

A recall has been confirmed for the US models, but no other markets have been included in the program at this stage.

To date, only Volkswagen’s 2.0 litre EA189 engine has been singled out as having cheated the system, but now 1.6 litre diesel engines are also under the microscope.

Volkswagen insists its vehicles currently sold in Europe are Euro6 emissions compliant and not affected, but government authorities in the UK and Italy are calling for widespread testing to determine if the claims are true.

Also seeking answers are transport departments in South Korea and Canada, and the Australian Competition and Consumer Commission (ACCC) has launched its own investigation.

Volkswagen Australia has reached out to head office in Germany and is awaiting further instructions before making its move for local customers.

IS VOLKSWAGEN ALONE?

If one carmaker can beat the system, albeit temporarily, surely others can also escape the eye of environmental authorities?

As sunset follows sunrise, it was inevitable that other carmakers were going to be called into question over whether or not their vehicles are as clean and ‘green’ as they claimed.

And first in the firing line is fellow German carmaker BMW, after Germany’s Autobild reported its X3 and X5 SUVs were recently found to have exceeded acceptable emissions levels during ‘real world’ driving.

BMW wasted no time in responding, saying its cars “do not use any software that can influence the emissions in the test cycle”.

Other carmakers haven’t waited to be asked and have declared that their vehicles comply with regulations, including Renault, Mercedes-Benz and Jaguar Land Rover, while Volkswagen’s own Porsche, Lamborghini and Bentley brands also say they are in the clear.

Internet users have been less than kind with their response to Dieselgate

Internet users have been less than kind with their response to Dieselgate

Renault went one step further, with a spokesman telling the UK’s Autocar that the carmaker welcomed tougher testing procedures for emissions.

The Dieselgate saga is a further blow to consumer confidence, particularly in the US.

Kia and Hyundai were forced to address calls in recent years that their fuel consumption claims were impossible to match in the real world, and Ford has also compensated owners over similar claims.

WHAT NEXT?

Thousands of Volkswagen, Audi and Skoda customers in Australia now wait for the word to come down from Volkswagen’s head office over whether their vehicles are involved in the defeat device scandal.

If they aren’t involved, the local arm will attempt to pick up the piece and move forward. But if they are involved, what then?

A recall may also be issued in Australia, but the participation of owners in such a recall is not guaranteed.

Owners will no doubt be monitoring the outcome of the US recall, but may hesitate to take part if software changes alter the performance or economy of their vehicles in a negative way.

It’s fair to say a certain percentage of owners will be more concerned over ownership costs, reliability and driveability of their vehicles – and the service they’re getting from their local Volkswagen dealer – verses what’s escaping from the tailpipe.

If the Federal Government is prepared to step in, participation in the recall may be declared ‘compulsory’ to ensure vehicles are complying with environmental laws but Federal Governments have one eye fixed on the polls these days and aren’t keen on moves that may upset the mood of the electorate.

Stay tuned to TMR for more.

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