Volkswagen Dieselgate Archive

  • Dieselgate: VW settles on buybacks for US, Canada

    The Dieselgate saga has taken another step towards a resolution in North America, according to a Reuters report. The Volkswagen Group has agreed upon a settlement to buy back more than 83,000 vehicles in the United States with affected 3.0 litre TDI V6 engines, while Canada will also see a buy back campaign for 105,000 vehicles with the affected 2.0 litre four-cylinder TDI engines.

    US market vehicles affected include the 2009-2012 VW Touareg and Audi Q7, 2013-2016 VW Touareg, 2013-2015 Audi Q7, 2013-2016 Porsche Cayenne and the 2014-2016 Audi A6 Quattro, A7 Quattro, A8, and Q5.

    For the US market, VW has agreed to pay more than US$225 million (RM1 billion) into a fund towards reducing diesel pollution, in addition to the buying back of the affected vehicles – this is on top of the US$2.7 billion the automaker group had agreed to pay for the offsetting of emissions from 475,000 2.0 TDI-powered vehicles.

    Another $2 billion (RM8.96 billion) will be allocated for the infrastructure and development of zero emissions vehicles over the next 10 years. The company has agreed to introduce at least three additional EVs to its line-up by 2020, including an SUV. Meanwhile, the company will pay $25 million (RM112 million) in fines to the California state air board.

    In Canada, the automaker will spend 2.1 billion Canadian dollars (RM7.04 billion) in a buy back campaign for the affected 2.0 TDI vehicles in the country, on top of the C$15 million (RM50.3 million) it will pay as civil penalty in Canada. Covered are the 2009-2015 Jetta, 2009 Jetta Wagon, 2010-2013 and 2015 Golf, 2012-2015 Passat, 2013-2015 Beetle, 2010-2014 Golf Wagon, 2015 Golf SportWagen and 2010-2013 and 2015 Audi A3.

     
     
  • Audi automatic transmission found to have emissions cheating device in the United States – report

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    We thought we’ve seen the worst of Volkswagen’s ‘dieselgate’ emissions cheating scandal, but if the latest revelation from Bild am Sonntag is true, the carmaker group could be back in hot soup. According to the German news daily, the California Air Resources Board (CARB) in the United States found a defeat device in an Audi model fitted with an automatic transmission last summer.

    The software, claimed to lower carbon dioxide emissions if the car detected it was being tested for emissions, is also said to have been fitted to both petrol and diesel vehicles in Europe, and is separate from the device that was the centre of the original scandal last year.

    The report stated that the newly-found device monitored steering wheel movement to detect if it was being tested. If the wheel was not being turned – indicating that it was being tested in a laboratory – then a special gear-shifting programme would be activated to produce lower carbon dioxide emissions than in normal driving. The programme would be switched off if the wheel was turned more than 15 degrees.

    Bild am Sonntag also said that Audi stopped using the software in May, just before CARB discovered it in an older model, adding that the company has already suspended several engineers as a result. The paper also stated that an Audi spokesman had declined to comment, saying that Ingolstadt is currently in talks with US and California regulators to fix 3.0 litre diesel models, which also feature a defeat device.

    Automotive News said that CARB had no immediate comment regarding the Bild‘s report, and Audi was not immediately available to comment.

     
     
  • Volkswagen ordered to compensate Audi Q5 owner in Spain over diesel emissions defeat device – report

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    The Volkswagen diesel emissions cheating scandal could have repercussions beyond the United States. A Spanish court ordered two Volkswagen Group subsidiaries in Spain on Wednesday to pay €5,000 (RM23,100) to an owner of an Audi Q5, which was fitted with a defeat device used to pass emissions tests.

    Automotive News reported that the buyer was seeking compensation after he found out in the wake of “dieselgate” that his car, purchased in 2013, contained software which made the vehicle appear cleaner in exhaust emissions testing than it really was, according to the court ruling.

    As a result, the Spanish court in the city of Valladolid imposed the fine on Valladolid Wagen and Volkswagen España, equivalent to 10% of the car’s value. The decision marks the first time a Spanish judge has ruled in favour of a buyer of a Volkswagen Group car with the defeat device.

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    The report stated that the ruling could open the door to a wave of new consumer lawsuits, with Spanish consumer organisation OCU calling for other owners of affected cars to join more than 5,500 others in filing a class-action lawsuit against Volkswagen. The Spanish high court also said last October that it had begun investigating Volkswagen vehicles in the country.

    The “dieselgate” fiasco was brought to the attention of the world after Volkswagen admitted in September last year to secretly installing defeat devices in 11 million diesel-powered vehicles worldwide in order to cheat emissions testing, particularly in the US. On Tuesday, a US judge approved a US$14.7 billion (RM61.9 billion) settlement between Volkswagen and regulators there.

    A source at Volkswagen Audi España told the news agency that the carmaker would appeal the latest ruling.

     
     
  • Ex-Volkswagen CEO Winterkorn facing five years’ jail?

    Volkswagen Winterkorn apology video screenshot

    The German judiciary has targetted former Volkswagen CEO Martin Winterkorn and a current member of the VW group management board in a criminal investigation over the “Dieselgate” scandal.

    It was reported in Automotive News that the prosecutor’s office in Brunswick, Germany – which is in VW’s home state of Lower Saxony – has initiated an investigation in which, if Winterkorn and the unnamed board member are found guilty, could mean five years’ jail, or a fine.

    The investigation is based on “sufficient real signs” which indicate VW failed in its duty to disclose the possible financial damage of its attempts to manipulate emissions testing for its diesel engines prior to September 22, 2015, when VW made a public admission over its illegal circumvention of emissions testing.

    VW diesel engine

    While the investigation is not uncovering any new facts, the prosecutor’s office did confirm that current VW chairman Hans Dieter Poetsch – VW’s chief of finance at the time Dieselgate broke – was not a person of interest, or under suspicion. VW said in a statement that its own internal legal examination have not disclosed any clear or severe breach of duty of any members of the board, current or previous.

    Winterkorn stepped down as CEO of VW last September after VW admitted to cheating in US emissions tests, and disclosed that the emissions-cheating software had been installed in 11 million vehicles sold around the world. Concurrently, reports have emerged that VW is considering removing 40 models from the range of vehicles it manufactures across the group.

     
     
  • Volkswagen dealer to put dieselgate scandal into film

    Volkswagen Jetta CKD 14

    While we know a movie of the dieselgate scandal involving Volkswagen is in the works, it appears that there’s another that’ll get to the heart of the issue, Automotive News reports. It’s expected to come out either in the form of a documentary that’s divided into a number of episodes or a full-length feature film, and will be shot by Steve Kalafer, an Oscar-nominated filmmaker who also happens to be a Volkswagen dealer.

    The documentary is called Backfire: The Volkswagen Fraud of the Century, and is still in the process of filming. Based in the US, Kalafer has been a dealer for 39 years now. “I started with two gas pumps and a one-car showroom. I’ve been with all of these manufacturers all of these years,” said Kalafer, who is also chairman of the 17-franchise Flemington Car & Truck Country.

    According to the 66-year-old, he’s concerned over the way VW’s leadership has handled the emissions crisis as well as the brand’s long-term fate. In the film, issues will be examined through the accounts of customers, dealers and regulators, and researchers from West Virginia University – who first brought the scandal to light in 2014 – will also be interviewed. “I will not have a point of view. The participants will,” Kalafer disclosed.

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    The point to all this? “The reality is that unless these issues are dealt with straightforwardly, honestly and with equity, Volkswagen in hindsight will have destroyed their company,” he stressed, adding that decisive measures are needed to face the harm inflicted on customers and dealers.

    Those severely affected, in Kalafer’s view, are single-point Volkswagen dealers who have put in their life’s savings and have staked their reputation on the line with the Volkswagen brand – those who have weathered the company’s history of ups and downs in the US. Kalafer claims that to Volkswagen, these dealers are “no more important than a Hershey wrapper after the piece of candy has been consumed.”

    Kalafer has also approached the company itself to talk about the film. “When I came to Volkswagen [to discuss the film], they said, ‘why are you doing this?’. I said, to tell the truth,” the filmmaker cum dealer revealed. He noted that the brand has so far been “silent” on ways that it plans to compensate both its customers and dealers.

     
     
  • Volkswagen investors file multi-billion dollar lawsuit

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    Volkswagen’s institutional investors have filed a multi-billion dollar suit against the automaker. The lawsuit claims that there were breaches of its stock market duty concerning the dieselgate scandal, Reuters reports.

    Claimed damages amounting to USD$3.6 billion (RM14.9 billion) was filed at a regional court in Lower Saxony, Germany and is being brought upon by some 278 investors worldwide. Some of these institutions include German insurers and US pension fund Calpers.

    In the lawsuit, law firm TISAB highlighted that Volkswagen had failed to keep markets properly informed between June 2008 and September 18, 2015. Meanwhile, a motion for a “model claims” – a German legal procedure – has also been tabled.

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    An account of events leading to the violation of US emissions law that was publicly announced by the US Environmental Protection Agency (EPA) was published earlier this month by Volkswagen. In it, it appeared that the company was aware of the issue well ahead of the EPA announcement.

    “Due to the fact that – according to our information and experience – Volkswagen AG persistently denies any settlement negotiations and also refuses to waive the statute of limitation defence until now, it was necessary to file this first multi-billion euro lawsuit,” said Andreas Tilp, a lead lawyer from TISAB.

    This is not the first lawsuit that the embattled automaker has been slapped with. Earlier this year, the Department of Justice filed a court action against the company. The lawsuit amounting to USD$90 billion (RM343 billion) was filed on grounds that the carmaker attempted to cheat its way past the nation’s Clean Air Act with emissions-manipulating devices.

     
     
  • Dieselgate: VW knew about issue in May 2014, banking on previous precedent to get away with fines

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    Volkswagen AG (VW) today announced that it had submitted a defense statement to the Braunschweig District Court regarding a violation of disclosure obligations. In the statement, VW stated its belief that it had complied with and fulfilled its obligations under German capital markets law.

    The press statement goes on to say the roots of the Dieselgate scandal began in 2005, when VW decided to market diesel vehicles in the US, using the EA189 diesel engine as the basis of a new powertrain. VW then realised that US emissions levels for diesel engines were strict, in the order of 31 mg/km of nitrogen oxides (NOx), six times lower than the corresponding EU5 standard.

    In order to comply with emissions testing and meet objectives within the timeframe and budget of the EA189 project, “an un-named group at levels below the Group’s Management Board in the powertrain development division decided to modify the engine management software.” With this modification, emissions values were generated in bench testing that differed substantially from those under real driving conditions.

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    The issue came to light when a study published by the International Council on Clean Transportation (ICCT) in May 2014 highlighted the emissions irregularities and the California Air Resources Board (CARB) was notified. On May 23, a memo was forwarded to Martin Winterkorn, then-Chairman of the VW Management Board.

    While Winterkorn’s reaction to this memo was not recorded, a second memo dated November 14 was forwarded to Winterkorn, that referred to a cost framework of approximately 20 million euro for the diesel issue in North America. This did not initially receive particular attention at the management levels of Volkswagen. In the statement, VW says, “the issue was “treated as one of many product issues facing the company” and “did not initially receive particular attention at the management levels of Volkswagen”.

    During a meeting with CARB on December 2 2014, VW offered to recalibrate the first and second generation EA 189 type diesel engines in the course of regular service work that was already scheduled in the North American market for December 2014. Subsequent tests conducted by CARB showed that improvements in the calibration for the affected engines in the US were not sufficient to reduce the nitrogen oxide emissions to an acceptable level.

    At the end of August 2015, VW technicians gave a full explanation of the technical causes for the irregularities discovered regarding the emission of nitrogen oxides from its diesel vehicles in the US to lawyers from the VW legal department as well as to the attorneys from US law firm Kirkland & Ellis.

    Volkswagen Touareg TDI

    VW was advised that in the past, defeat device violations under US environmental law by other car manufacturers had been sanctioned with settlement payments that were not especially high for a company the size of VW. The highest fine imposed at the time, in 2014, was USD100 million, and affected about 1.1 million vehicles, which was twice the estimated 500,000 VW diesels that it was looking at rectifying.

    This sum corresponded to a fine of not more than approximately USD91 per vehicle. VW assumed that the diesel matter could be resolved with US authorities by disclosing the software modification, agreeing on appropriate measures to restore vehicle compliance with the law and the payments of potential fines in line with prior U.S. settlements.

    At the moment Jones Day investigators – appointed by VW – are sifting through enormous amounts of data, of which 102 terabytes have been secured. As previously announced, Volkswagen will report preliminary results of the investigation in the second half of April.

     
     
  • Volkswagen to rotate key staff for better supervision

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    In an effort to improve oversight at the Volkswagen Group, Hans Dieter Poetsch stated that the company is planning to start rotating its key staff, sort of like a game of musical chairs. The supervisory board chairman of VW AG stated that such a move was important in order to implement better supervision over their operations.

    Speaking to Welt am Sonntag, Poetsch said, “we are planning a rotation principle for certain functions. The employees concerned will spend only a limited time in certain positions before moving on.”

    “We will bolster checks, determine responsibilities in a clearer way and better implement technical supervision of procedures,” he added. This “four-eyes principle” where at least two people are involved in key duties (future engine software) would become a company norm.

    However, Poetsch admits that the job rotations would prove to be more challenging when it comes to more complex roles. Volkswagen could draw upon the expertise of staff across the group to circumvent this potential shortcoming, he claims.

    “It’s easier said than done. There are few employees that are able to programme an engine control unit. But we have these people across the different brands. For example, experts at Audi could switch to Porsche and from Porsche to VW and so on,” Poetsch said.

    The Volkswagen Group has been hit by a series of scandals over the past few months, first over “dieselgate” where the US Environmental Protection Agency (EPA) found that certain diesel models were equipped with “defeat devices” used to circumvent tough federal emissions testing. In a separate incident, it was revealed that engineers doctored in-house fuel economy and CO2 emissions tests in Europe to hit internal targets.

     
     
  • VW won’t compensate European owners of diesel cars with “defeat devices,” will recall them instead – report

    VW jetta TDI US-spec

    Own a Volkswagen diesel engine fitted with so-called “defeat devices” and want to be compensated in a similar fashion to North American buyers, but live on the other side of the Atlantic? Well, it’s bad news, as the Volkswagen Group has confirmed that it will not offer such packages to European buyers, according to Automotive News Europe.

    The German conglomerate, until recently the world’s biggest carmaker, will instead enact a series of measures to guarantee the least inconvenience as possible to owners, as their vehicles are recalled to get them compliant with type approval regulations, a Volkswagen spokesman said.

    “Financial compensation will exclusively be offered to customers in the US and Canada,” he added, referring to the “Goodwill Package” that compensates some 482,000 North American owners with a US$500 (RM2,150) prepaid Visa card, another US$500 prepaid card to be used at VW dealerships, as well as three years’ 24-hour roadside assistance.

    Volkswagen contends that only US buyers deserve compensation, as they were investing in a niche fuel technology and were specifically sold on a “clean diesel” vehicle. This contrasts with Europe where the fuel is widespread, and more than half of new cars sold are diesel-powered.

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    The company added that unlike in the US, where diesel cars cost more to run due to the more expensive fuel, it’s the opposite situation in Europe – not only is diesel cheaper than petrol in some countries, but buyers also receive tax benefits for running oil burners.

    Additionally, VW believes that as it’s closer to a EU-wide recall of affected vehicles, European customers will be less inconvenienced by the fallout of the diesel emissions scandal than those in the US, where Wolfsburg’s discussions with authorities over a proposed solution are at “a less advanced stage.”

    Volkswagen has admitted that some diesel-powered models may be fitted with engine management software designed to cheat federal tests for harmful nitrous oxide (NOx) emissions, conducted by the US Environmental Protection Agency (EPA). This could affect up to 11 million VW, Audi, Skoda and Seat passenger vehicles and VW commercial vehicles worldwide.

    Of these, around 8.5 million cars were sold in Europe, almost 18 times the number of cars affected in the US – this would mean that offering a compensation package like the one in the US would cost Volkswagen much more in Europe. The report states that giving a combined €1,000 (RM4,570) worth of cash cards and vouchers to each affected owner would set VW back around €8.5 billion (RM38.8bil).

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    Volkswagen is on the verge of conducting one of the biggest recalls in European automotive history – it has sent plans to rectify vehicles powered by the EA189 family of engines fitted with these “defeat devices” to the German Federal Motor Transport Authority (KBA) for approval.

    The company has developed a fix for all EA189 engines except 1.2 litre versions – the rectification for the latter, reportedly amounting to a software adjustment, should be ready soon. Volkswagen expects the issues regarding the recall to be clarified by the end of the month or the middle of December at the latest.

    Recalls will commence once KBA approves the fixes – the German body’s decision should be accepted by all 28 EU nations, as EU-wide certification only requires approval from one country, even though every EU country is authorised to provide type approval.

     
     
  • Volkswagen engineers overinflated tyres, added diesel to engine oil to cheat CO2 emissions testing – report

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    Another one to add to the “dieselgate” saga – after Volkswagen admitted that up to 800,000 vehicles in Europe have been provided with falsified carbon dioxide emissions data, German newspaper Bild am Sonntag now reports the sordid details as to how engineers within the company cheated in-house tests to gain better emissions and fuel economy numbers – and with it, lower the tax imposed on the cars.

    One engineer opened up to Wolfsburg regarding some of the manipulation techniques employed by the employees, which include raising the tyre pressures beyond 3.5 bar, as well as mixing diesel into the engine oil in order to improve engine operation and reduce fuel consumption.

    As Germany’s Federal Motor Transport Authority (KBA) only used manufacturer-supplied data – it doesn’t do actual emissions testing like the United States’ Environmental Protection Agency (EPA) – the doctored figures were freely accepted.

    The latest scandal sparked from now-resigned CEO Martin Winterkorn‘s audacious target – announced at the 2012 Geneva Motor Show – to reduce carbon dioxide emissions by 30% in 2015. The engineers claimed it wasn’t possible to achieve that goal through legal means, but feared punishment from the top brass for underperforming, so they began to rig the tests – apparently as early as 2013.

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    Volkswagen’s BlueMotion range of supposedly cleaner, more fuel-efficient vehicles was particularly hard hit by the engineers’ manipulation of data – the Polo BlueMotion presented the biggest inconsistency, producing 18% higher carbon dioxide emissions than the stated figure, while Golf models emitted as much as 15% more CO2 than officially claimed.

    Since the fraud was made clear by the engineer, the company confirmed the inconsistencies, after which CEO Matthias Müller and chairman Hans Dieter Pötsch delivered the news personally to German chancellor Angela Merkel in Berlin. Müller is also said to have championed for a new, more open corporate culture since taking office in September, with less fear of punishment from the top management.

    As previously reported, the inconsistencies in CO2 emissions will affect the taxes owners will have to pay for their vehicles, but Volkswagen has already said it will be working on paying the difference rather than having customers foot the bill.

     
     
 

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