The Volkswagen emissions cheating scandal rumbles on. The German automaker has pleaded guilty in the US to using a “defeat device” to give false readings for their diesel cars in the United States, which had been marketed on their environmental friendliness. VW has been fined $4.3 billion. It also has agreed to pay some $15 billion more in compensation and buy-back schemes for US customers it suckered. Meanwhile, the US has indicted six former VW executives.
The company had put aside $19.2 billion to cover claims. New estimates suggest that with action by other regulators and duped VW diesel owners around the world, this figure could be way short of what will be needed.
The robust action in North America contrasts with what has been happening in the EU, where 8.5 million cars are affected by the “defeat device.” European regulators have been found to be lax, even to the extent that one VW executive has claimed the software cheat was not specifically forbidden under European rules. This statement requires some thought. There are minimum emission levels. Even if a diesel engine cannot meet them in normal motoring, it is supposedly all right if when tested in artificial conditions, the defeat device can kick in and give a reading which satisfies the rules.
The EU is trying to make itself look better. Regulators now cast doubt on the emission claims for one of VW’s top of the range Audi models. There are also suggestions that yet more VW models than the German firm has admitted, are in fact involved. And another shoe waiting to drop is the possibility that other European manufacturers have used similar technology, though all have denied it.
There is, of course, an element of politics in this. America is glad to attack the world’s biggest carmaker whose small- and medium-size saloons challenge US producers in a highly competitive market. Twenty years ago, the US sought to give a hard time to Toyota, which now has six manufacturing plants in America. Volkswagen has just one factory, in Indiana. A Pennsylvania plant closed in 1988. For the EU, VW is a major brand and export earner. For all the talk of free markets and trade agreements, politicians in Brussels are every bit as keen as their American counterparts to protect their key automotive sector.
Yet the irony is that although Volkswagen has been found to be deliberately cheating its customers on a mind-boggling scale, last year it returned record sales worldwide. Does this mean that consumers do not care if a big corporation deceives them or perhaps believe that there is nothing much that they can do about it if it does? Or could it be that they take the view that now that their favorite carmaker has been caught out in wrongdoing, things can only get better? In fact the only way to meet even the lower EU emission standards is to downgrade the existing diesel engine’s once highly acclaimed performance.
Or could it be something else that the environmentalists who have led the charge against VW would rather not admit? Could it be that consumers only pay lip service to environmentally friendly vehicles? In reality they simply do not care and will make their choices on the gizmos and the image that their new car gives them rather than the pollution that comes out of its exhaust pipe.
