VW Emissions scandal update 2
Volkswagen’s UK car sales are down 9.84 per cent in October compared to the same period last year – suggesting that customers are losing faith in the brand following the emissions scandal.
Sales of sister brands Skoda and SEAT are also down – and the VW Group is reportedly attributing the fall to the damaging events of past weeks. Audi sales appear to be unaffected but some brands unconnected to the VW emissions scandal including Ford and Vauxhall have also suffered sales dips. This is potentially a result of uncertainty among consumers in the wake of the emissions scandal revelations.
Volkswagen has also revealed that its own internal investigations into the diesel emissions scandal have uncovered serious inconsistencies with the mpg fuel economy and CO2 emissions ratings for 800,000 vehicles. Only “the majority” of the cars affected are said to be diesel models, but a spokesman has now confirmed that specifc petrol engines are also affected.
In a statement from the Volkswagen Group it was announced that “irregularities were found when determining type approval CO2 levels. Based on present knowledge around 800,000 vehicles from the Volkswagen Group could be affected. An initial estimate puts the economic risks at approximately two billion euros.”
VW says it is engaged in dialogue with the type approval agencies to determine what these findings will mean for the company and its customers but the estimated economic risk of 2billion Euro (around £1.4billion) underlines the seriousness of the findings. VW’s share price took a 7 per cent tumble on the Frankfurt Stock Exchange after the news broke out.
Do VW’s 3.0-litre TDI engines have a ‘defeat device’?
This news of issues with mpg and CO2 ratings comes hot on the heels of the US Environmental Protection Agency’s (EPA) announcement that larger-engined VW Group cars may also contain the ‘defeat device’ software designed to cheat US emissions tests. It reported that some of the Group’s V6 TDI engines come with a software function that was not adequately described in the application process.
That means Porsche may now drawn into the VW emissions scandal for the first time alongside the VW Touareg SUV and Audi models including the A6, A7, A8, Q7 and Q5. VW has countered the claims saying that “no software has been installed in the 3-litre V6 diesel power units to alter emissions characteristics in a forbidden manner.”
The investigation is continuing but for the time being, versions of the VW Group’s 3.0-litre TDI diesel engine now join the EA 189 2.0-litre and 1.6-litre units on the list of engines officially implicated in the VW ‘dieselgate’ emissions scandal. I
t is now also confirmed that the 1.4-litre ‘Cylinder on Demand’ petrol engine – found in several Audi, VW, Skoda and SEAT models – is ‘implicated in the emissions irregularities.
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Cynthia Giles, assistant administrator for the Office for EPA’s Enforcement and Compliance Assurance, said; ‘”VW has once again failed its obligation to comply with the law that protects clean air for all Americans.
“All companies should be playing by the same rules. EPA, with our state, and federal partners, will continue to investigate these serious matters, to secure the benefits of the Clean Air Act, ensure a level playing field for responsible businesses, and to ensure consumers get the environmental performance they expect.”
Scroll down for everything you need to know about the VW emissions scandal…
VW group cars
Three-point plan to recall UK’s dieselgate cars
In the UK, the VW Group is looking to implement a three-stage plan to recall and repair all 1.2 million vehicles affected by its diesel emissions scandal by the end of 2016.
The Group is currently working with the German Motor Industry Federation (KBA) to approve a permanent fix to the emissions crisis – with the first round of recalls expected to start in the first quarter of 2016.
The first vehicles to be recalled are the EA 189 2.0-litre TDIs, ideally in early 2016, with the rest of the 60 models from the five affected brands recalled and repaired by the end of 2016.
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VW’s UK boss Paul Willis has confirmed the 1.2-litre and 2.0-litre diesel engines will require a software fix, while vehicles with a 1.6-litre diesel will also need new injectors fitted. This means around 400,000 UK cars would require mechanical changes. Speaking before the House of Commons’ select committee, Willis failed to answer questions relating to whether or not UK owners would be compensated but transport secretary Patrick McLoughlin has since urged VW to consider compensation for affected motorists who face falling residual values on their cars.
While UK vehicles look to get by with software tweaks and injector swaps, vehicles in the US may be in need of physical changes to the catalytic converters and/or the Selective Catalytic Reduction (SCR) AdBlue urea injection systems. VW’s US boss, Michael Horn, admitted these changes may be needed to pass the strict US emissions tests. Horn also added that any fix will likely affect the performance of the cars, and that customer compensation is currently being looked into.
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VW Group recall: numbers of UK cars affected
The VW Group has said that the following quantities of UK vehicles are set for a recall…
- • VW passenger cars – 508,276
- • Audi – 393,450
- • SEAT – 76,773
- • Skoda – 131,569
- • VW commercial vehicles – 79,838
Total VW Group cars set for UK recall: 1,189,906
Check if your VW Group car is subject to the recall
The websites below let owners of VW Group cars check whether or not their models are fitted with the EA 189 engine and subject to the recall. All you need is your car’s VIN number which should be located at the bottom corner of the windscreen on the driver’s side or in the car’s service book.
- • VW recall website
- • Skoda recall website
- • SEAT recall website
- • Audi recall website
VW Group UK hq
What is the VW emissions scandal?
The dieselgate emissions scandal has snowballed since the VW Group was caught by US authorities violating vehicle emissions standards. Volkswagen was found to have installed a ‘defeat device’ software algorithm on its cars to manipulate exhaust emissions tests making its cars appear cleaner than they are.
The US Environmental Protection Agency (EPA) found four-cylinder diesel engines made by the German car giant were built with a software device that detects when the vehicle is undergoing emissions tests and activates full emissions control measures to produce results far better than those achieved in real-world driving.
The net result is that cars pass strict US emissions limits under laboratory conditions, but when unplugged from the testing rigs, the EPA states that the diesel engines emit nitrogen oxides (NOx) up to 40 times the legal limit. The limits for N0x emissions in Europe are less stringent than the EPA’s standards and it remains unclear whether the cars found to be deliberately cheating US tests have broken the law in Europe, although VW admits that the same software is present.
Message to VW customers on the ‘dieselgate’ scandal
VW Scandal: EA 189 engines affected
The engines in question are VW’s type EA 189 units, found in over 11 million diesel cars with 1.2, 1.6, and 2.0-litre capacities across the Volkswagen Group’s product range but no longer fitted to new models in Europe.
VW says five million of its cars around the world use the EA 189 engine, with known diesel models including the Mk6 Golf, Mk7 Passat and the first generation Tiguan equipped exclusively with the EA 189 engine. Further models that include the EA 189 engine in their line up are the Jetta and Beetle sold between 2008 and 2015.
Audi and Skoda have said 3.3 million of their cars with so-called EU5 compliant engines come with the ‘defeat device’ installed. Some 1.42 million Audis with the software are found in Western Europe, with 577,000 in Germany alone, and 13,000 in the US.
An Audi spokesman said the affected models include the A1, A3, A4, A5, A6, TT, Q3 and Q5. While Skoda also confirmed that 1.2 million of its cars are also affected by the diesel scandal.
There have also been rumours concerning other VW Group engines being dragged into the scandal but nothing has been confirmed as yet. Contrary to reports, VW Group has said that vehicles fitted with Euro 5 and Euro 6 EA288 engines are not affected by the emissions scandal.
The VW Group has informed US authorities that its 2016 diesel models do contain an ‘auxiliary emissions control device’ that may help cars produce lower emissions during an official test – this is different to the defeat device that was originally found to be cheating Environmental Protection Agency emissions tests, sparking the VW emissions scandal.
The VW Group’s 3.0-litre TDI engines have also been implicated by the EPA but again, Volkswagen denies that defeat device software is present on these models. The 3.0 TDI engine is significant as it’s fitted to large VW and Audi models but would also drag Porsche models into the scandal for the first time.
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Audi TT Ultra – front tracking
The Volkswagen Group has set aside £4.7 billion to cover potential damages arising from the emissions scandal, but the Group could face fines up to £12 billion in the US alone. The 11-million vehicle planned recall is expected to cost the Group approximately £4.3 billion.
Since the emissions crisis started, the Group’s CEO, Martin Winterkorn has resigned and was replaced by the former Porsche chief executive, Matthias Muller. Winterkorn is now facing criminal prosecution in Germany for alleged fraud.
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VW emissions crisis timeline: how it happened
- • 18/09/2015: The US environmental standards agency EPA files a Notices of Violation of the Clean Air Act to the Volkswagen Group stating cars sold between 2009 and 2015 included software to specifically pass EPA’s emissions tests.
- • 20/09/2015: Then-CEO, Martin Winterkorn, issues a public apology admitting to “breaking the trust” of customers.
- • 22/09/2015: VW announces the engine in question is the type EA 189, found in 11 million vehicles worldwide and the company has set aside £4.7 billion to cover the costs of the scandal.
- • 23/09/2015: Martin Winterkorn resigns as the CEO of the Volkswagen Group. VW confirm new EU6-compliant diesel engines not affected by the defeat device software.
- • 24/09/2015: Germany’s Transport Minister, Alexander Dobrindt states the cheating software can be found in 1.6 and 2.0-litre diesels in Europe.
- • 25/09/2015: Matthias Muller appointed as the CEO of the Volkswagen Group. Dobrindt confirms 2.8 million diesel cars affected in Germany alone. VW confirms five million of its own cars affected.
- • 28/09/2015: Audi and Skoda admit 3.3 million of their diesel cars were built with the emissions cheat software. Winterkorn faces criminal prosecution in Germany for alleged fraud.
- • 30/09/2015: VW Group announces that 1,189,906 UK cars will be recalled.
- • 01/10/2015: 4,000 new cars with affected engines withdrawn from sale in the UK.
- • 05/10/2015: VW Group brands start to launch websites where owners can check if their cars are affected by the recall
- • 07/10/2015: Muller announces that the recall of affected models will begin early in 2016 and be completed by the end of that year with some cars needing a hardware fix.
- • 08/10/2015: The head of VW US, Michael Horn, admits he knew of the defeat device software as early as spring 2014. VW offices raided by German investigators.
- • 09/10/2015: German transport ministry officials say that 3.6m European cars with the 1.6-litre EA 189 engine need a hardware fix.
- • 12/10/2015: Paul Willis, VW UK boss, tells MPs that all 1.6-litre EA 189 engines need new fuel injectors and outlines 3-point plan to fix all recalled cars.
- • 13/10/2015: VW board announces new electric car focus and €1bn of cost cutting.
- • 27/10/2015: Toyota out sells the VW Group for the first time in 2015, becoming the best selling car manufacturer in the world.
- • 28/10/2015: VW report first quarterly loss in 15 years, while CEO Muller announces a five-point plan to turn things around.
- • 29/10/2015: UK Transport Secretary Patrick McLoughlin says VW must consider compensating motorists with affected cars
- • 02/11/2015: EPA reveals that models fitted with the 3.0-litre TDI diesel engine alsop have defeat device software but VW is quick to deny this.
- • 03/11/2015: VW investigations reveal that mpg and CO2 levels are set too low on 800,000 petrol and diesel vehicles.
New VW Group CEO and bosses in the firing line
Martin Winterkorn isn’t the only high-ranking VW Group boss having walked the corporate plank; other directors and chief executives have come under the microscope with the company needing to start on a “clean sheet”, according to the former CEO Winterkorn. New boss Matthias Muller has also hinted at job losses accross the group.
Jurgen Stackmann, previously chairman of SEAT has been replaced by Luca de Meo from Audi, as Stackmann replaces Christian Klinger as VW’s sales and marketing boss.
US, Mexican and Canadian markets are to be combined under a single North American region, which was to be headed by former Skoda chairman, Winfried Vahland. However, Vahland quit the job after just three weeks due to differences in opinion over VW’s organisation of the North American business.
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The Volkswagen Group will also be split into four key divisions to simplify communications and operations – volume, premium, sports and commercial vehicles.
The volume division will consist of VW’s own brand, Skoda and SEAT, while the premium division will feature the likes of Audi, Lamborghini and Ducati. The sports segment will have the Group’s Porsche, Bentley and Bugatti brands, and the commercial division will house truck and commercial vehicle operations.
VW emissions crisis: your key questions answered
Volkswagen Golf GTI cornering
I own a VW car, what should I do?
The VW scandal shouldn’t affect your everyday driving; the software only alters the car’s behaviour when undergoing emissions tests. However, given that VW is issuing a recall in the UK, you might have to make a trip to the local garage at the VW Group’s expense.
The VW brands have released an online service where users input their VIN number to see if their cars are affected by the scandal but the company will still contact customers individually to make arrangements for the recall to take place. Recalls are due to begin early in 2016.
But, the real issue is whether VW can remedy the problem and still replicate the emissions levels produced by its cars in the official tests. If not, it may face claims for fraudulent misrepresentation and breach of the 1979 Sale of Goods Act by owners. The Department for Transport has already announced it will be re-testing a range of diesel cars in the UK to compare real world figures to the ones achieved in official tests that are quoted by the manufacturers.
If my car is faulty, will I get compensation from VW?
This remains a question VW are unable to answer. However, in the US, VW’s boss Michael Horn admitted that customer compensation is something the company is looking into. The VW Group is already facing individual lawsuits over the emissions test cheat software.
I’m considering buying a VW, should I think again?
At this stage it’s too early to know how the automotive market will be shaped by the diesel scandal. VW Group brands are currently the only manufacturers involved but it may not be exclusively their cars that are taking the hit in residual values – other diesel models could be affected. If you’ve got your eyes set on a specific VW it’s best to wait and see where the situation heads in the weeks to come although dealer have reported some buyers trying to negotiate big discounts in light of the crisis.
The same can be said for those looking to sell their VW, Audi or any of the makes involved. VW has lost a big chunk of its market value in the stock markets, indicating the damage that has been done to the reputations of the brands involved. This could ultimately funnel down to the resale value of VW vehicles but it’s too early to say on what scale.
What about my vehicle tax band, will I have to pay a higher rate?
No. The Department for Transport (DfT) has announced that UK taxpayers will not incur higher vehicle excise duty (VED) if their existing vehicles are found fitted with the defeat device software.
Which manufacturers are involved in the diesel crisis and which are not?
With VW Group companies firmly in the firing line, rumours have circulated that other car brands could also be involved but there’s no evidence of this yet. So far, BMW, Daimler, Mercedes Benz, Ford, Jaguar Land Rover, the PSA Group, Volvo, Toyota, Lexus, Fiat Chrysler Automobiles, Honda, Subaru, Kia, Mitsubishi, Vauxhall, Hyundai, Ford, Mazda, and Renault-Nissan have all categorically denied manipulating emissions tests by using software based algorithms or other means.
Emissions and efficiency testing rolling road
What does this all mean for VW and diesel cars in the future?
VW is facing one of the biggest crises to hit the automotive industry in years. The company is already looking to have to deal with US authorities billing it up to £12 billion for violating the US Clean Air Act, and numerous other countries are currently launching their own investigations into the matter.
The ‘dieselgate’ scandal is starting to take its financial toll on the Volkswagen Group too. the company has reported its first quarterly loss in over 15 years and has also been overtaken by Toyota as the top-selling global car maker.
The Volkswagen Group has reported a £1.2billion loss in its quarterly earnings, after setting aside £4.8bn to cover the diesel emissions scandal. VW is expecting a further fall in profits, but has said that it expects sales to grow this year.
The Group has already confirmed it will waste no time in getting to the bottom of the issue and building for the future. The VW board announced there will be “streamlined processes” to cut costs, and a move away from diesel with the development of modular electric car platforms. Investment is also set to be reduced by 1 billion Euro with the possibility of job losses.
VW Group CEO Matthias Muller has announced a five-point plan to turn the company around.
Matthias Muller’s 5-point plan for the future of VW
- 1. Support all of the 11million VW customers affected
- 2. Complete the investigation into the defeat device with those involved will facing severe consequences.
- 3. Cultural and managerial realignment within Volkswagen
- 4. Detailed analysis of the group’s 300 model portfolio.
- 5. Create ‘Strategy 2025 with emphasis shift from sales to customer and employee satisfaction.
But it’s not just VW that needs to clean up its act; it’s the whole automotive industry. Over half the cars bought in the UK are diesels, and buyers are now waking up to the fact that their cars are not as clean as they thought. To ensure diesels have a future in the automotive industry, manufacturers have to come together to ensure their cars are appropriately built and tested in a way that reflects real-world driving conditions.
What does this mean for emissions and mpg testing, how will it look in the future?
There are already plans to adopt more stringent emissions and mpg tests in the EU, and the VW diesel scandal will surely add fuel to the fire in showing just how important appropriate testing standards are for car buyers.
A World harmonised Light Vehicle Testing Procedure (WLTP) is scheduled to come into force in 2017, and will introduce a global set of emissions testing standards. The WLTP is developed to be more representative of real world driving conditions, with more dynamic braking, acceleration and speed times.
The WLTP will also feature a Real World Driving Emissions (RDE) test, which would consists of a real-world driving scenario for emissions tests. Cars will be hooked to machinery that records their emissions as they are driven on the road and feeds them to a computer.
The real-world element will be a more accurate representation of vehicle mileage and emissions, helping manufacturers like VW win back trust from buyers.
Auto Express website poll hints at damage to VW brand
A poll of 8,500 users on the Auto Express website has shown that 71% of the public now trust the Volkswagen brand less than they did before. Users were asked, ‘how has the VW emissions scandal affected your opinion of Volkswagen? While 71% of the respondents said they trusted the brand less, 25% said they trusted it the same as they did before and only 4% said they trusted VW more in the wake of Dieselgate.
The Auto Express view on the diesel scandal
By editor-in-chief- Steve Fowler
Opinion bad dealers VW
Opinion bad dealers VW
This is one of the biggest scandals I’ve ever seen in over 25 years of reporting on the car industry. For a company like Volkswagen, which prides itself on engineering excellence, to admit to rigging emissions tests erodes trust not only among its own customers, but all car owners.
It remains to be seen whether any cars in other territories are involved, but if the company is capable of cheating emissions tests in the US, surely it could be doing it everywhere. And if Volkswagen is doing it, many assume that rivals are doing the same – after all they often share technologies and parts suppliers.
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If I was a VW customer who’d invested my hard earned cash in a car that was sold to me and marketed as being environmentally friendly, I’d be very angry knowing that the information I based my buying decision on might have been falsified. And I’d probably be looking for recompense. I’m not sure that near-£5bn VW has put aside to take care of this issue will be enough. And I’ll be really interested to learn exactly how they plan to fix the problem on the 11 million cars affected.
We’ve known for many years that the tests used for creating mpg and emissions figures are ludicrously out of touch with the real world, but now we know that car makers are capable of cheating in official tests, too. This is a very bleak time for the Volkswagen Group and the car industry in general. Much work needs to be done to restore the trust of existing and potential customers – and fast.