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About that VW Emissions Scandal

Community, News September 1, 2016

VW Emissions Scandal

What’s the deal for the company and car owners?

For the ambitious Volkswagen, it’s been an ongoing nightmare. Sales are down. Prices are lower. And it’s not much better for its stockholders. Their value was down 38 percent on a recent two-day period. But what about owners?

The EPA emissions scandal that surfaced just over a year ago seemed to be a death sentence for Volkswagen just when their worldwide ambitions were surfacing. But on the other hand, maybe not.

VW recently introduced its new Golf Alltrack wagon, which has helped generate some optimism for the future. More than 40,000 units are committed to the market next year, dealers say.

Despite all the bad news, VW’s US head Hinrich Woebcken says it is the start of the way back to respectability.

Why?

“Product. Product. Product.”

What he also means by that is the American (and maybe worldwide) recognition of giving someone a second chance.

“One thing which is great about your country is you guys give people who did a mistake a second chance,” said Woebcken.

He has been the mastermind behind the German company’s efforts to be more of a major player in the US market.

He was widely quoted as telling auto writers:

“I believe we have today, with that car, a good start for this momentum.”

He sees VW’s revival as stemming from the new model, as well as the arrival next year of two cross-over models. They are specifically designed to appeal to American tastes.

Volkswagen to its credit was forthright in its admission of guilt: Fairly early on in the investigation, the company admitted that 11 million of its vehicles were equipped with software used to cheat on emissions tests.

The issue now for VW is what will happen next.

But what about owners: regardless of the future VW actions?

Diesel versions of the Jetta’s, Beetle’s and Golf models from 2009 to 2015 are affected. Audi’s during that time are also impacted. Also the 2014 and 2015 Passat diesel.

Owners have the option to sell their cars back to VW or wait for an emissions fix, which is an unprecedented action. It would cost VW up to $10 billion.

VW will have to spend billions more on environmental remediation and electric-vehicle initiatives.

What this all means is that VW is hardly out of trouble. Some models are still under investigation with no settlement deal yet. And despite all the publicity and media accounts, there is still confusion about who perpetuated the deception.

Volkswagen’s agreement to compensate customers still has issues with investors. The automakers faces 1,400 lawsuits, according to one estimate. They are mainly from German investors.

The U.S. has tougher diesel emissions standards than Europe, where such cars are far more common. Meeting those steeper requirements can mean reductions in fuel efficiency and performance, making it tougher for an automaker like VW to advertise their diesel cars against more typical vehicles in the U.S.

The only advantage the car maker could have gained from the deception was in advertising.

It appears that even if it had not happened, any benefits were virtually non-existent.

So the moral here is a simple one.

Honesty is still the best policy.

By David Wilkening

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