A Spot of Bother in Wolfsburg
The emissions scandal continues to rebound around the car world – and potentially German politics – as our car fanatic considers what next…
Article by Marc Stickley
Unless you’ve been living in a cave, you may have heard of a little kerfuffle surrounding some bad behaviour in Wolfsburg. In case that’s not clear, or in fact you are living in a cave, I mean the Volkswagen emissions scandal.
So what’s been going on? It appears to boil down to a case of large scale corporate fraud. The automotive giant Volkswagen - comprising of VW itself, Audi, Skoda, SEAT, Porsche, Bugatti, Bentley and Lamborghini, as well as commercial vehicles - has been up to no good with emissions tests. Tests on VW diesel cars in the US weren’t matching the results seen in the lab while recording official results and an investigation was launched. When checked again by the US Environmental Protection Agency (EPA), the engines were found to be producing up to forty times more Nitrogen Oxide (NOx) than allowed by US legislation. The lab results were apparently being cleverly produced after software in the VW engine management systems, which could determine that the vehicle was in test conditions, entered a ‘safe’ mode that cut power and hence emissions. On the road, the software switched the engine to normal power.
So what’s the fall out? Well so far, VW share price is down by about a third, VW’s group CEO Martin Winterkorn has stepped down, saying his company had broken the trust of the public and figures as high as 11 million have been mentioned as to how many cars are affected. There have been hundreds of thousands of recalls in the US where the EPA can charge the company for each car at fault - up to $37,500 per vehicle - so VW have had to set aside £4.7 billion to cover the costs. But legal preparations are being made on both sides of the Atlantic, so the fines for breaching legislation may not be the end of it. Audi and Skoda today announced that their EU5 compliant engines (now superseded by EU6) are also affected, SEAT are sure to follow suit, as they share engines. Porsche use VW group diesel engines as well, so may not be out of the woods yet. As Bentley, Bugatti and Lamborghini don’t do diesel, they may be safe from the technical fallout, but who knows if the company can weather the storm.
But aside from the fraud and the potential for environmental damage, you may wonder what the fuss is all about. For years it has been common knowledge that manufacturers’ cars return figures in official economy testing that are impossible to match in the real world. You may have picked up that this scandal surrounds US legislation against NOx emissions, whereas Euro tests are for Carbon Monoxide (CO). But you could argue the damage is done - the VW group reputation is in tatters, German politicians are claiming this affects the (until now) solid reputation of the whole German automotive industry.
As to whether any other manufacturers are involved, so far it appears not, but you can be sure that if they haven’t already, the boffins will be testing for just that. In the meantime, maybe you can bag yourself some cheap VW Group stock, or perhaps a used car bargain… as long as the potential to be a bit less green doesn’t bother you in the short term, before recalls and fixes can be enacted. I just hope that this doesn’t break the company, as some really great automotive engineering and some truly great marques are involved. Could this be the Lancia rust scandal of the century? I think perhaps this is bigger… 