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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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VW electric camper gets go-ahead

An all-electric camper concept from Volkswagen has been given the go ahead to begin production, Reuters reports.

The Volkswagen Bulli premiered at the Detroit Automotive show in January as a concept, and in the time since, Volkswagen has been considering whether or not to bring the vehicle to market. Volkswagen brand chief Herbert Diess says feedback he has received suggests now is the time.

The VW ID Buzz.

“After the presentations at the global motor shows in Detroit and Geneva, we received a large number of letters and emails from customers who said, ‘please build this car’,” Diess said in a statement.

The van is a modification of Volkswagen’s well known Microbus camper van, and will be one of the 30 electric models the company plans to have in production by 2025. The electric van will go on sale in 2022 under the name ID Buzz, and VW said it will target customers in North America, Europe and China.

The company also plans to build a cargo version of the van. The New Zealand government is encouraging the adoption of fully electric vehicles with RUC exemptions and other incentives. While private ownership of EVs in New Zealand is higher than that of commercial ownership, commercial ownership is growing.

At present there is only one EV van on the New Zealand market available new, the Nissan E-NV200.

 

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German car makers in emissions deal

Emissions have reached toxic levels in many parts of Germany

Politicians and car makers in Germany have agreed to completely overhaul engine software on 5.3 million diesel vehicles in a bid to cut pollution, avoid a ban on diesels and repair the industry’s reputation in Europe.

Justice Minister Heiko Mass told the German newspaper Bild that the agreement was only the first step in an ongoing process, and bans on diesel vehicles in the future would not be ruled out.

“The legal requirements for clean air remain in effect,” he told journalists.

Air pollution has significantly decreased over the past decade, but is still breaching current standards.

In February, the EU Commission found limits for the deadly nitrogen dioxide pollution were exceeded 28 areas of Germany, and was responsible for 10,610 premature German deaths in 2013.

Chancellor Angela Merkel’s government has come under increasing pressure for not doing enough to crack down on vehicle pollution, with Merkel’s close relationship to auto executives heavily criticised.  

However, ministers have been cautious about disrupting the auto industry, which provides 800,000 jobs, and is Germany’s biggest exporter.

“We expect a new culture of responsibility from carmakers,” Environment Minister Barbara Hendricks, from the centre-left Social Democrats, said at a news conference.

“There is much to make good – to the environment, to people in cities, car owners and not least to the security of the car industry in Germany and its hundreds of thousands of jobs.”

The German Association of the Automotive Industry (VDA) said the software updates would cut nitrous oxide emissions by 25-30 per cent for the 5.3 million affected cars.

The software update is expected to cost Volkwagen, Daimler and BMW a combined $800 million.

The popularity of diesel vehicles in the EU’s largest market is falling as a result of the ongoing emissions scandal. German diesel car sales fell 12 per cent in July, and diesel now makes up 40.5 per cent of new car sales, down from 46 per cent in 2016.

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Audi to cut $15b to fund EVs

Audi has pledged to cut costs by over $15 billion by 2022 to help fund its shift to electric cars, Reuters reports.

The highly profitable division of Volkswagen plans to bring five new pure-electric vehicles to market, starting with an e-tron SUV, which will be produced from next year.

Last year, an all-electric Audi R8 e-tron had a brief production run of 100 vehicles, and retailed for over $1.5 million before it was pulled in October.

Reuters says that the bulk of the $15 billion cuts will come from Audi’s research and development budget.

A spokesperson for Audi declined to comment.

More plans for Audi’s development were revealed to the news outlet. The car maker plans to develop a new production platform in conjunction with Porsche, meaning both Volkswagen brands can save money by sharing components and modules.

Audi is one of European brands embroiled in ongoing allegations of widespread cheating of emissions tests, and several top executives have been investigated recently. Last month, the German transport ministry ordered a recall of around 24,000 A7 and A8 SUVs for exceeding current emissions standards.

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Volkswagen recall

Volkswagen is recalling 385,000 cars in Germany.

The information which comes in from news agency, DPA, states that the manufacturer will update the software on the cars’ anti-lock brake systems.

The vehicles affected by the recall include the VW, Audi and Skoda brands. According to the news agency, the braking control system may not function properly in certain driving conditions – including when the driver over-steers, under-steers or slams on the brakes.

In January, the automotive giant recalled over 600,000 Audis in the US over defects that could lead to fires or airbag malfunctions.

In the same month, Volkswagen recalled almost 50,000 vehicles in China due to brake problems when using cruise control.

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VW faces legal action

A group representing 180,000 car owners in Europe is seeking a full refund of Volkswagen vehicles affected by the scandal at an estimated cost of $6.9 billion, the Financial Times has reported.

Patrick Haas of AKD, a law firm based in Rotterdam, is serving as legal counsel for the Stiching Volkswagen Car Claim Foundation, which was established in October 2015.

Despite the successful case against Volkswagen in the US, the German car maker has denied breaking any laws in Europe and has refused to offer buyers compensation.

Experts have said there is a slim chance of successful litigation after Germany’s transport ministry approved a recall last December to ensure all affected cars would meet legal requirements and emissions standards.

Haas, however, said this latest recall does not fix the emission issue, and there is “still a big gap between lab conditions and real road conditions.” The group hopes to bring the case to court this spring.

Another legal representative, Damon Parker from Harcus Sinclair in the UK, told the Financial Times that “VW is forcing everyone to launch claims in their own jurisdictions,” and the group was attempting to bypass this by creating a “pan-European alliance.”

“We do not see a legal basis for customer actions,” Volkswagen said in a statement. “All vehicles affected are and have been technically safe and roadworthy. They can be driven on roads without any limitations and can be sold without loss in residual value. The required authorisations remain valid.”

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The coolest VW in Europe?

Volkswagen has teamed up with European appliance giant Gorenje to create a special edition vintage-styled refrigerator reminiscent of the VW Bulli/Kombi van treasured by New Zealand camping enthusiasts.

The fridge features a chrome trim and the famous VW logo and is available in baby blue and bordeaux.

Despite the retro styling, Gorenje says the fridge contains cutting-edge cooling technology and has the highest achievable energy efficient rating.

This limited-edition VW Bulli model will be available at retailers across the UK from the middle of the year.

With no authorised resellers in New Zealand, however, the Gorenje probably won’t make it to these shores any time soon.

 

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VW vans to include AEB

Volkswagen Commercial Vehicles has announced it will fit all its vans with autonomous emergency braking, which are now available as standard on current Caddy, Transporter and Crafter models.

The system, dubbed Front Assist by VW, recognises dangerous distances to the vehicle in front and helps to ensure safe stopping. In dangerous situations, it will first warn the driver of on-road hazards, and brake the car if there is no response.

The system also includes City Emergency Braking, which assists the vehicle at speeds below 30km/hr and will reduce speed, apply the brakes and even steer the car as needed.

Peter Shaw, CEO at Thatcham Research, said, “Volkswagen is a trailblazer and should be applauded for being the first manufacturer to fit AEB as standard on all its vans in the UK.  The truth is that we are seeing a year on year rise in deaths and serious injuries involving vans which this technology can help to avoid.”

According to Thatcham Research, autonomous emergency braking systems are “probably the most significant development in vehicle safety since the seat belt” and could potentially save over a thousand lives in the next decade.

“Producing safe, reliable vans has been at the heart of our brand for over 60 years. But technology is advancing at a pace and we’re continually seeing more and better ways to keep drivers safe on the road,” said Volkswagen Commercial Vehicles’ head of marketing, Sarah Cox.

Volkswagen’s commercial vans are sold in modest quantities in New Zealand. Last month, 18 new Caddy units were sold, and two Transporters. The most popular van model was the T6, with 28 sales, which will come with Front Assist in future generations.

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Volkswagen Arteon due in September

The Volkswagen Arteon, the new flagship saloon of the German car maker, will arrive in New Zealand in September, Volkswagen New Zealand has said.

“Since we first laid eyes on the Arteon, we knew Volkswagen were creating something quite special that will appeal to a wide range of customers here in New Zealand,” said Volkswagen general manager Tom Ruddenklau.

A four-cylinder direct-injected engine powers the Arteon, producing 206kW and 350Nm of torque, and is coupled with a seven-speed dual-clutch gearbox and 4MOTION drivrtrain. DCC adaptive chassis control comes standard, as does 19-inch alloy wheels.

Volkswagen have included a range of driver assistance and safety systems, including Emergency Assist, which monitors the driver’s behaviour and will correct the steering and apply the brakes to avoid an accident. Other features include lane assist, adaptive cruise control, electronic stability programme, pedestrian monitoring, forward-collision warning and an emergency city brake.

Inside the cabin, a customisable 12.3-inch Active Info Display containing Apple Carplay and Android Auto is paired with a 9.2-inch touchscreen infotainment and navigation system that can be controlled with hand gestures.

Pricing for the Volkswagen Arteon begins at $74,990.

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Researchers find VW ‘defeat device’

A team of researchers from around the world have found the code buried deep in onboard software which enabled Volkswagen to circumvent American and European emissions tests for over six years before allegations of cheating surfaced in 2015.

The researchers, led by computer scientist Krill Levchenko from the University of California San Diego, obtained copies of Volkswagen onboard software from the company’s own maintenance website and from various forums online run by car enthusiasts, said the UC San Diego News Centre.

“We found evidence of the fraud right there in public view,” Levchenko said. “We found the system and how it was used.”

The code allowed the car’s onboard computer to determine the vehicle was undergoing an emissions test, and then activate emission-curbing systems to lower the pollutants emitted.

When a car is tested for emissions levels, it is placed on a chassis equipped with a dynamometer, which measures the engine’s power output. The test then begins a specific speed profile designed to imitate real-world urban driving with frequent stops.

Because the conditions for this test are standard across all stations, and publicly available, manufacturers are able to anticipate the exact conditions of the test. The code found in Volkswagen vehicles checks the speed, distance, and wheel position, and if it matches the conditions of the emissions test, the code will allow the onboard computer to activate the emissions-curbing system.

When the test was over, the onboard computer then deactivated these systems. Cars emitted up to 40 times the amount of nitrogen oxide allowed under US regulations once the emissions-curbing software was deactivated.

 “The Volkswagen defeat device is arguably the most complex in automotive history,” Levchenko said.

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Volkswagen gearing up for Fieldays

VW’s first Fieldays tent in 2010

 

Volkswagen is coming back to Mystery Creek for New Zealand’s biggest agricultural event next month, and will showcase their latest line-up and a special Fieldays deal.

Attending Fieldays has becoming a mainstay for many car companies in New Zealand, with an opportunity to advertise their vehicles to huge crowds. Last year, 130,684 people attended the four-day event.

A range of new models will be on display in the Volkswagen tent, including the all-wheel drive Amarok V6 4MOTION, the Tiguan, a Kombi van and the face-lifted Golf line-up. Volkswagen will also show its first electric car, the e-Golf, with a 150km driving range.

Volkswagen will also be fundraising for the IHC Calf & Rural Scheme with a sausage sizzle. The company has supported the IHC team since 2011.

“The very positive feedback we had from previous years reiterated the importance of being present at this massive national event,” said general manager of Volkswagen New Zealand, Tom Ruddenklau.

This year’s Fieldays takes place from Wednesday June 14 to Saturday June 17 at Mystery Creek, Hamilton.

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