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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 to recall 4.86 million cars in China

Volkswagen AG will recall 4.86 million vehicles due to issues with air bags supplied by bankrupt auto parts maker Takata Corp, China’s quality watchdog has said today.

Reuters reports that Volkswagen and its Chinese joint venture FAW-Volkswagen and SAIC Volkswagen delivered 3.98 million vehicles in China last year.

The recall comes after the watchdog asked the German automaker, General Motors Co (GM.N) and Daimler AG’s Mercedes-Benz earlier this year to recall vehicles equipped with Takata air bags.

Over 20 million cars in China had air bags made by Takata, the watch dog has estimated.

The airbags which have been linked to at least 16 deaths and 180 injuries globally, and have the potential to explode with too much force and spray shrapnel.

China’s General Administration of Quality Supervision, Inspection and Quarantine said across all of VW’s Chinese operations, it would be required to recall over 5 million vehicles.

The watchdog said the recall would begin in March next year and continue into 2019.

Volkswagen officials did not provide immediate comment when contacted by Reuters.

Of 37 vehicle manufacturers affected by the faulty air bag issue in China, 24 had recalled 10.59 million cars as at the end of June. A further five had made plans to recall 1.26 million vehicles.

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Carmakers agree to diesel filter

German carmakers have agreed to install software in 5.3 million cars to make exhaust filtering systems more effective.

The software will bring down the vehicles’ emissions of nitrogen oxide by 25-30 percent.

A statement from German industry body Verband der Automobilindustrie (VDA) said the software updates would be free for motorists and would be just as effective in cutting nitrogen oxide levels as bans on diesel vehicles would be.

The targeted diesel cars will be mainly in the Euro-5 category for car emissions and some in the Euro-6 category.

Meanwhile, the manufacturers will also offer incentives for consumers to trade in diesel cars that are 10 years old or older.

BMW will give a discount of up to €2,000 ($NZ 3,229.83) to drivers who exchange a Euro-4 category BMW when they buy a new diesel BMW, electric BMW or Mini.

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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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Jaguar I-Pace wins Concept Car of the year award

The North American Concept Car of the Year Awards for 2017 have been held at the Concours d’Elegance of America, and included cars that were total concepts to those in the early stages of production.

The awards were founded in 2002 and recognises concept vehicles that have made the strongest impact on automotive design, engineering and market responsiveness, judged by a team of automotive journalists across North America.

Jaguar, appearing for the fourth time as a finalist, was awarded the 2017 Production Review Concept of the Year for the I-Pace concept car. The electric crossover, aimed to compete with the Tesla Model X, is a first for Jaguar, who designed an all-new platform and drivetrain during development.

A European launch is scheduled for the end of the year, and the I-Pace will reach the US in 2018, with details to come for Australia and New Zealand.

The Concept Car of the Year was awarded to the Aston Martin RB 001 Valkyrie Concept, which was originally codenamed Nebula. Just 150 Valkyrie hypercars will be made when the car goes into production, which is slated to begin next year.

Judges couldn’t reach a consensus for the final category, and there was a tie for Concept Truck of the Year between the Genesis GV80 and the Volkswagen ID Buzz.

The all-wheel drive Volkswagen electric people-mover has a range of over 400km, and the design pays homage to the original Microbus.

From the four winners, the Jaguar I-Pace posted the highest overall score and was named the Most Significant Concept Vehicle of 2017, the second time Jaguar has taken out the top honours at the event.

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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 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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Judge OK’s 3-litre VW settlement

A federal judge has granted final approval on an agreement for embattled car maker Volkswagen to fix and buy back over 80,000 3.0-litre diesels in the United States, at an estimated cost of over $1.7 billion.

Owners of affected vehicles will be compensated between $10,000 and $23,000 if they chose to opt for fixes. Volkswagen could be forced to pay up to $5.8 billion if the fixes for 3.0-litre diesels are not approved by American regulators

The ruling is one of the final acts in the long-running emissions scandal, which began in October 2015 when it was revealed Volkswagen had fitted diesel vehicles with so-called ‘defeat devices’ to cheat emissions tests.

A separate settlement to fix or buy back 475,000 polluting 2.0-litre diesel vehicles was approved last spring.

Volkswagen spokeswoman Jeannine Ginivan told Reuters the settlement “marks an important milestone for Volkswagen and means that a resolution is available to all of our customers.”

In total, Volkswagen has agreed to spend $36.33 billion on various settlements. Last month, the car maker was sentenced to three years probation after pleading guilty to criminal charges, and agreed to broad reforms and independent oversight.

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