After so many years in the business as one of the top automobile manufacturers of the world, Volkswagen is facing a rather serious threat to its goodwill and, possibly to its existence as well, largely as a result of its shady business practices. From 2009 onwards, Volkswagen has been putting in a lot of software in 482,000 cars that it has sold in the US under the garb of clean diesel cars. The entire design has been done in such a way that the pollution controls of these cars are effective only when they are being examined for emissions in labs. Otherwise, as has been proved now, these cars may give off dangerous compounds that could form smog with gay abandon.
Regulators’ Opinion
It can be said without a shadow of a doubt that the regulators have been very angry at the expose. Recently, the Environmental Protection Agency of the US termed the violation of the Clean Air Act by Volkswagen to be a blatant one. The said body has already asked the German organization to get these cars fixed. The list of affected cars features the diesel TDI versions of some of the top Volkswagen models such as Golf, Beetle, Jetta, and Passat. It is also expected that Volkswagen may have to pay fines to the tune of $18 billion. Criminal charges could also be brought against it by the Department of Justice.
Volkswagen’s Situation
The whole issue has taken on greater proportions from this stage. Volkswagen has itself admitted that it has sold 11 million clean diesel cars all around the world. All these cars have software designed to fool regulators and most of these cars are supposed to be in Europe. It can be said without a shadow of a doubt that it is in a precarious position. Martin Winterkorn, its CEO, has already put down his papers. The company has also had to stop its sales of clean diesel cars for 2015 and 2016 in the US.
On top of that, it will also need to repair millions of car that are running on the streets now. This will no doubt increase its costs and inconvenience of the owners, thus affecting their goodwill in the long term. Volkswagen has reportedly set apart $7.3 billion for the purpose. This scandal has also taken a toll on its share prices and the company has lost 33% of its market cap in recent times.
Some Teething Questions
A number of questions are being raised as a result of the scandal. What were the reasons for Volkswagen’s cheating and how was it able to avoid the regulators for so many years? The reasons that come up following introspection would be that Volkswagen lied and cheated about its clean diesel cars because it had been unable to achieve the balance between low pollution and performance. As may be known, from 2009, Volkswagen had been putting in some detailed codes in its cars’ software that was used to track movements of the pedal and steering. Whenever there was any suggestion that the movements were being tested in a lab for emissions of nitrogen oxide, the car was automatically able to turn on its pollution control. Otherwise, these controls never came on.
Ruse Uncovered
This went on for years unnoticed by the regulators. It took an independent group named International Council on Clean Transportation to uncover the ruse. It wanted to check as to why there was such difference in the actual performance and lab test results of so many models of Volkswagen in Europe. This is why they associated with West Virginia University researchers. They inserted a probe in the exhaust pipes of many clean diesel cars of Volkswagen and then had them drive from San Diego to Seattle.
The results of these tests were shocking indeed. Jetta was found to emit nitrogen oxide 15-35 times more than what was permissible. In case of Passat, excess emission was mapped at 5-20 times more. The results were much different from what had happened at the labs. During May 2014, VW had been ordered by EPA and the air pollution regulator of California to look into the problem and fix it. The German company said that it had done so and the usual pattern followed. The lab tests were fine, but it was a different story with the actual performance.
It was at this point in time that the affair assumed serious proportions even as the EPA trained its intense searchlight on the carmaker and started questioning it about the obvious difference. It went so far as to say that it would disapprove of the 2016 line to be sold by VW. The company finally accepted that it had been cheating all the while by placing the defeat devices within the software codes with a lot of care so that they are not discovered.
Reasons for Cheating
Volkswagen is itself yet to come out with the reasons behind the cheating. That has, however, not stopped the experts from making their own guesses. Thanks to the NOx emission controls the cars were unable to perform to the desired levels. The engines became hot easily, wear and tear happened quicker, and mileage became less. A few experts also stated that the emission controls affected the car’s acceleration and torque, which meant that driving a VW car was not as enjoyable. In fact, it has also been seen that although it is against the law, a number of car-owners have switched off their emission controls in order to make their car perform better.
All this means that Volkswagen was unable to achieve the ideal balance of performance, low levels of pollution and fuel economy. At least, it was not able to do so in a profitable way. This is why it decided to do away with pollution controls and thus sacrifice environmental protection in the process. It achieved this by creating and incorporating software that could deceive the regulators as well. In fact, Volkswagen is not the first company to have done this. In 1998, truck manufacturers such as Volvo and Caterpillar had been caught doing the same thing by the EPA. It can also be said for sure that Volkswagen would not be the last company to have done this.
German police raid Volkswagen headquarters
The German police raided the headquarters of Volkswagen. According to media reports, the police, which seized hard disks and files, also raided private apartments in Wolfsburg and many other cities. The police sought to secure documents and digital data that can identify those responsible for the massive pollution cheating scandal.
German automotive watchdog orders Volkswagen to recall 2.4 million vehicles
Volkswagen has been ordered to recall 2.4 million vehicles by KBA, the German automotive watchdog. Volkswagen has admiited to cheating on emission tests for diesel vehicles. Media reports quoted a spokesman for the motor transport authority saying that “We are ordering the recall.” Last month Volkswagen admitted that the company had installed software in diesel vehicles. This was done to fool U.S. regulators about the true levels of their toxic emissions.
Volkswagen Group India recalls 3,23,700 cars
Volkswagen Group India has recalled around 3,23,700 cars. The cars, manufactured and sold between 2008 and November 2009, are fitted with the 1.2-litre 1.5-litre, 1.6-litre, and 2.0-litre EA 189 diesel engines. The Group is devising a communication program that would enable it to contact owners who have cars fitted with EA 189 engines through the group’s respective brands.