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VW announces Herbert Diess as new CEO

Volkswagen has chosen Herbert Diess as its new chief executive in an overhaul that includes streamlining the company’s multiple car brands into just three groups while preparing its truck business for a potential listing.

Matthias Mueller’s replacement with VW brand chief Diess follows slow progress in reorganising the group’s car brands, a key pillar of “Strategy 2025” to transform the Germany’s biggest car company into a leader in cleaner cars and to move on from its diesel emissions scandal of 2015.

For Volkswagen its the biggest development since it became a multi-brand conglomerate under former chief executive Ferdinand Piech.

The carmaker said it planned to create six new business areas and a special portfolio for China, its largest market, and split its brands into three new vehicle groups with categories for value, premium and super-premium nameplates.

The “super premium” group would include sports car brands Porsche, Bentley, Lamborghini and Bugatti. Audi would be excluded from this group and form its own premium division.

Analysts welcomed the appointment of Diess, a former BMW executive who has more than doubled profitability at the VW brand since taking charge in 2015.

“Diess is a man of action, he is the most plausible choice at VW to lead the group into the next phase of its transformation,” said Nord LB analyst Frank Schwope, who has a “buy” rating on Volkswagen.

Separately, VW said works council executive Gunnar Kilian, a close aide to labor boss Bernd Osterloh, will replace group human resources chief Karlheinz Blessing who will stay at VW as an adviser. 

VW will tighten leadership duties within the group and empower the heads of the three vehicle categories to take on company-wide responsibilities.

With VW’s core namesake brand shouldering the bulk of development spending within the group, Diess will also become responsible for R&D activities across the group. Rupert Stadler, CEO of luxury division Audi will take charge of group sales.

Oliver Blume, head of sports car brand Porsche and newly appointed to the group executive board, will oversee production at the multi-brand organisation, VW said.

Diess, Stadler and Blume will also take charge of the new groups Volume, Premium and Super Premium respectively, VW said, without giving more details.

Analysts at Goldman Sachs say there is 160 billion euros worth of “hidden value” in the European autos sector that could be unlocked through portfolio simplifications.

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VW set to replace Müller as CEO

Volkswagen has seen its reputation battered in recent years by the scandal

Volkswagen is set to replace its chief executive, Matthias Müller, due to the diesel emissions scandal that has cost the car manufacturer billions of dollars, led to the imprisonment of two executives, and ruined the German carmaker’s reputation.

Two people with knowledge of the situation told the New York Times that Herbert Diess, who is in charge of the company’s flagship Volkswagen brand, was likely to succeed Müller. The company said earlier on Tuesday that it was considering a leadership change, and a final decision was expected by the end of the week.

In the statement, Volkswagen said it was considering “a further development of the management structure of the group,” which could “include a change in the position of the chairman of the board of management,” referring to Müller.

Political leaders are currently pressing the German carmaker to compensate diesel owners who bought cars that turned out to be dirtier than advertised, which could add to the already huge cost of the scandal.

Müller, 64, took over Volkswagen days after it admitted in September 2015 that it had cheated on diesel emissions tests, installing illegal software in 11 million vehicles.

He succeeded in preventing a collapse of sales and profits. But Müller, who has spent his entire career at Volkswagen or its subsidiaries, struggled to deliver on his promise to remake the company’s solid foundation.

However, the carmaker has continued to suffer blows to its reputation, including revelations in January that it had financed tests on monkeys in an attempt to show that diesel exhaust was not as dangerous as it once was.

“This is a chance for Volkswagen to make a change,” said Christian Strenger, the former chief executive of Deutsche Bank’s wealth management division, who is suing Volkswagen because he said it violated its duty to shareholders by failing to be forthcoming about the emissions scandal. 

Diess has led Volkswagen’s push to mass produce electric cars, which are seen as essential to the company’s ability to defend itself against challengers like Tesla, Uber and Google that are trying to upend the auto industry.

German prosecutors have not charged anyone in the Volkswagen case, but they expect to complete their investigation this year.

Two former Volkswagen executives are currently serving prison sentences in the US after pleading guilty to charges including conspiracy to violate the Clean Air Act.

Müller was a high-ranking executive involved in product development at the same time that the company was developing the illegal software and deploying it in vehicles, however he has insisted he was ignorant of any wrongdoing, but he has faced the accusation that he was part of a system that allowed it to take place.

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VW will report ‘outstanding’ results this year

Matthias Mueller, CEO Volkswagen Group has announced that VW will report excellent group results this year due to record vehicle sales and spending cuts.

VW’s vehicle sales appear to have weathered the storm caused by the 2015 emissions scandal which cost the company billions of euros in fines and tarnished their reputation.

“It will certainly be quite outstanding in operational terms,” Mueller told Germany weekly paper Welt am Sonntag when asked to sum up the 2017 business year.

Matthias Mueller, CEO Volkswagen Group has announced that VW will report excellent group results this year due to record vehicle sales and spending cuts.

Last month, the CEO predicted that group deliveries would exceed the 2016 record of 10.3 million vehicles.

Cost cuts at the core passenger-cars division have caused the world’s largest automaker to raise its profit target for the year, and it has since also upgraded its mid-term profit and sales guidance.

On the other hand, Mueller said proposals by the European Commission for progressive cuts in carmakers’ average carbon dioxide (CO2) emissions by 2025 and 2030 will “cause us real pain.”

VW more than two years ago admitted to cheating in diesel emissions tests in the United States. It has set aside about 25 billion euros ($30 billion) to cover related fines and vehicle repairs and faces thousands of lawsuits worldwide. 

A signification portion of VW’s emissions scandal penance involves investment into eco-centric technologies and developing electric vehicle infrastructure, earlier this year the German carmaker agreed to spend $800 million in California and a total of $2 billion nationwide on EV infrastructure

VW is due to publish detailed 2017 results on March 13.

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VW to ‘Electrify America’

Volkswagen unit, Electrify America announced plans to install more than 2,800 electric vehicle charging stations at 500 sites across the US by June 2019.

A signification portion of VW’s emissions scandal penance involves investment into eco-centric technologies and developing electric vehicle infrastructure. So it’s no surprise that the German carmaker has agreed to spend $800 million in California and a total of $2 billion nationwide on EV infrastructure. 

Approximately 75 per cent of chargers will be located at workplaces, as workplaces are the second most likely place a vehicle spends time parked.

One problem the auto industry must overcome for mass adoption of electric vehicles is a lack of national charging infrastructure.

“One of the biggest barriers to the mass-market adoption of electric vehicles is access to chargers,” Electrify America CEO Mark McNabb said in a statement. “Having chargers where people work – and live – will help them see that an electric vehicle can be their primary vehicle because charging is convenient and reliable at the places where they spend time.”

Approximately 75 per cent of the new charging station sites will be located at workplaces. This aligns with one of the goals for the Electrify America program which is to increase charging infrastructure at the workplace, the second most likely place a vehicle spends time parked.

 Electrify America argues that employees with chargers at their workplace are six times more likely to drive a plug-in electric vehicle than the average worker, and chargers located at the workplace can potentially double an electric vehicle owner’s daily driving range. 

The Volkswagen e-golf.

Furthermore their website claims that the charging stations will offer the most powerful charging technology ever developed. “350 kW charging has the capability to add about 20 miles of range per minute to a vehicle, allowing up to 300 miles of fuel to be added in only 15-20 minutes for some next generation vehicles.”

Joining Electrify America in this initiative are SemaConnect, EV Connect and Greenlots.

 

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Volkswagen ‘misused me’

Volkswagen AG executive, Oliver Schmidt, who is due to be sentenced this week in connection with the emissions scandal, has written to the judge to say he feels “misused” by VW.

Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges it installed secret software in vehicles to evade emissions tests.

Schmidt has pleaded guilty in the U.S. District Court to wrongdoing associated with the emission scandal that has cost the German car maker around $30 billion. 

After being informed of the existence of the emissions software in the summer of 2015, according to his guilty plea, Schmidt conspired with other executives to avoid disclosing “intentional cheating” by the automaker in a bid to seek regulatory approval for its model 2016 VW 2 liter diesels.

The letter, originally published by German newspaper Bild am Sonnstag, Schmidt says “I must say that I feel misused by my own company in the diesel scandal or ‘Dieselgate’.”

Schmidt faces up to seven years in prison and a fine of between $40,000 and $400,000 after admitting to conspiring to mislead U.S regulators and violating clean air laws.

He is due to be sentence on December 6 2017.

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Volkswagen to spend big to meet EV quota

Yesterday the Volkswagen Group announced that it plans to spend 10 billion euros by 2025 in order to develop and build all-electric and plug-in hybrid vehicles as it seeks to comply with upcoming stringent rules in China.

The group, which includes Volkswagen AG and Audi AG, intends to launch 15 of the new energy vehicles (NEV) models over the next two to three years, with an additional 25 after 2025.

China’s NEV production and sales quotas, which must be met by 2019, have prompted an increase in electric car partnerships and deals as automakers in China race to ensure they do not fall short.

China chief, Jochem Heizmann, speaking ahead of the Guangzhou auto show, added that the group is aiming to sell 400,000 new energy vehicles per year in China by 2020 and 1.5 million per year by 2025.

The Volkswagen Group is also confident that its group companies and their local China joint venture partners will be able to generate enough NEV sales volume to account for NEV quotas by 2019, Heizmann said, adding that there will be no need to buy credits.

The Guangzhou auto show starts on Friday.

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Volkswagen continues its upward trend

At 550,900 vehicles, worldwide deliveries by the Volkswagen brand in October 2017 were 7.7 per cent higher than the previous year.

 In total, the Volkswagen brand has delivered 5.04 million vehicles to customers worldwide so far this year. As a result, deliveries from January to October were 3.2 percent higher than the previous year.

“This has been the most successful October of all time for Volkswagen. A special boost came from the market in China, where there was an increase of some 26,000 vehicles compared with the same month last year. We are seeing positive momentum in many regions and are delighted with the continued strong demand for our vehicles,” said Jürgen Stackmann, Volkswagen Brand Board Member for Sales.

The Volkswagen brand continued is positive trajectory in the largest market, Asia-Pacific. In the month of October 317,100 vehicles were handed over, corresponding to an increase of 8.6 per cent compared to last October. The Tiguan was highly sought after, with 31,100 units delivered in October, an incredible increase of 37.2 per cent. 

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One third of VW vehicles still affected

A third of the 1.2 million cars manufactured by Volkswagen with devices to cheat emissions tests remain unfixed, two years after the scandal erupted.

VW admitted back in September 2015 that they had been using software to cheat diesel emission tests in the United States and has since paid out compensation to U.S. motorists but has refused to do so in Europe.

The British parliament’s Environmental Audit Committee said that Volkswagen had slowed the pace of its work in recent months and called on the transport ministry to take action.

“It is over two years since the VW emissions scandal was discovered, a third of vehicles have yet to be fixed and rates have slowed considerably,” said committee Chairwoman Mary Creagh, a lawmaker for the opposition Labour Party.

“The campaign will remain open for the foreseeable future but the 100 percent point can never be reached for the following reasons: Some vehicles will have been scrapped, some written off, some exported and some owners decline or never respond,” a spokesman said.

 

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Meet the all-new Polo

With more than 14 million models sold to date worldwide, the Polo is one of the world’s most successful compact cars. 

The sixth generation polo has been designed to meet the challenges of the modern world, equipped with a multitude of driver assistance systems that were previously reserved for the Golf and Passat class.

The new Polo is now much more spacious than its predecessor, even more spacious than a Golf in 1997. This has resulted in a significantly increased boot volume, which has grown by 25%, from 280 to 351 litres.

It is also the first Volkswagen model to feature a new generation of the optional Active Info Display. At the same time, it has been given the latest generation of infotainment systems which includes an impressive 8.0-inch glass covered touchscreen.

The highly equipped all-new Polo looks out for drivers on the road with a host of state-of-the-art driver assistance and comfort systems. These include Front Assist with City Emergency Braking, Pedestrian monitoring and Blind spot monitoring detection.

Tom Ruddenklau, General Manager of Volkswagen New Zealand, says, “The new Polo personifies what Volkswagen is all about; world class engineering and technology that is accessible to the people. The New Polo is a technological marvel and benefits from the significant R&D investments Volkswagen has placed into its older siblings the Golf, Tiguan, Passat and Touareg.”

“It possesses world class features and safety normally found in cars twice its price. We are fortunate to have many thousand existing customers, many of whom are on their 2nd or 3rd Polo and it is great to be able to offer these loyal customers something quite special with the new sixth Generation Polo”.

The new Polo will arrive in New Zealand in February 2018. More information on specifications and pricing will be released soon. 

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Cartel inquiry widens

The investigation widens over whether several German carmakers have conspired to fix prices in diesel and other technologies over several decades.  (more…)

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VW’s emissions scandal bill hits $30bn

Amid arrests, falling share prices and continued uncertainty, Volkswagen’s bill from the ongoing emissions scandal has reached USD$30 Billion.

Reuters reports that on Thursday, German prosecutors arrested Wolfgang Hatz, the first top executive within the group to be detained amid a widening probe into cheating at VW’s Audi brand.

Wolfgang Hatz, arrested on Thursday by German prosecutors for his senior level role in VW’s emissions cheating scandal.

VW’s growing financial woes and Hatz’s arrest were also discussed on Friday at a regular meeting of the carmaker’s supervisory board, one person familiar with the matter said.

VW shares fell as much as 3 per cent on Friday, as traders and analysts reacted to the continuing fallout from the scandal.

VW, Europe’s biggest automaker, admitted in September 2015 that it had used illegal software to cheat U.S. diesel emissions tests, sparking the biggest business crisis in its 80-year history. Before Friday, it had set aside 22.6 billion euros ($26.7 billion) to cover costs such as fines and vehicle refits.

Last year, VW agreed with U.S. authorities to spend up to $15.3 billion to buy back or fix up to 475,000 2.0-litre polluting diesel cars.

On Friday, VW said it was extending the timeline and setting aside an additional 2.5 billion euros (USD$3.0 billion) as hardware. VW says the complications will amount to 5,200 euros per car.

“We have to do more with the hardware,” a VW spokesman said.

In Europe, where only a software update is required for the 8.5 million affected cars, plus a minor component integration for about 3.7 million 1.6-litre vehicles included in that number, fixes are running smoothly, the spokesman added.

The additional provision will be reflected in third-quarter results due on October 27, VW said.

 

 

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