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24 Sep 2015 | Author: | No comments yet »

Dealers, Owners Feel Frustrated and Betrayed by VW Scandal.

Bob Rand poses for a photo in his 2014, fully loaded Volkswagen diesel Passat on Wednesday, Sept. 23, 2015, in Pasadena, Calif. Volkswagen will start firing people responsible for rigging US emissions tests and shake up management tomorrow, as the German carmaker tries to get to grips with the biggest scandal in its 78-year history.

CEO Martin Winterkorn today quit but denied any personal wrongdoing after it emerged that the firm had been selling diesel cars with software that only turns on emissions controls during tests His future has looked uncertain after company president Michael Horn admitted it had been “dishonest” selling diesels with software that turns on emissions controls during tests – 11 million cars worldwide are affected. The supervisory board of Europe’s biggest car maker is meeting tomorrow to decide a successor to chief executive Martin Winterkorn, who resigned yesterday. But the car giant said it was “working at full speed to clarify irregularities concerning a particular software used in diesel engines” and has found “discrepancies… involving some 11 million vehicles worldwide”.

Now he’s trying to sell it. (Chris Carlson) LOS ANGELES — Bob Rand bought his Volkswagen Passat last year for its clean emissions and high gas mileage. The sources said it would give initial findings from an internal investigation into who was responsible for programming some diesel cars to detect when they were being tested and alter the running of the engines to conceal their true emissions. Plus Sylvan had some office optics to consider; he’s a strategy director for New York University’s Institute for Policy Integrity, a nonpartisan think-tank focused on energy policy. “Essentially, the fuel economy was a major draw,” he said. “I don’t think I had considered the idea that one of the world’s largest carmakers was in a secret, sinister corporate plot.” The kicker for Sylvan: Had he bought the same car with a standard gas engine, it could have arguably been cleaner, and would have cost about $3,000 less. Earlier this year consumer magazine Which? found 98% of cars tested by its experts failed to beat or even match the mpg claims made by the manufacturers. Top managers could also be replaced, even if they did not know about the deception, with US chief Michael Horn and group sales chief Christian Klingler seen as potentially vulnerable.

His sole bite has been from a man who offered $7,500 on speculation that he could resell it in Mexico. “Volkswagen was somebody that you could rely on for cutting-edge products and quality and all those things and now you find out that they’re not above lying just flat out,” said Rand, who plans to join a class-action lawsuit against VW. “That’s probably about as bad a thing as a company can do is lie to your face when you’re buying a $35,000 car.” Rand’s anger at the world’s top-selling car company was echoed Wednesday by private dealers, auto wholesalers and owners across the U.S. as fallout from the smog test trickery mounted. Another recent study also found insurers are colluding to maximise profits by steering motorists towards their own recommended garages for accident repairs. Volkswagen shares have plunged around 20% since US regulators said on Friday the company could face up to $18 billion in penalties for falsifying emissions tests. Another major scandal surfaced in the late 1970s when Ford recalled its Pinto model in the United States amid safety fears about the fuel tank being in the rear of the vehicle. The company said on Tuesday that 11 million of its cars globally were fitted with engines that had shown a “noticeable deviation” in emission levels between testing and road use. “There will be further personnel consequences in the next days and we are calling for those consequences,” Volkswagen board member Olaf Lies told the Bavarian broadcasting network, without elaborating.

Environmental Protection Agency first disclosed Friday that stealth software makes VW’s 2009-2015 model cars powered by 2.0-liter diesel engines run cleaner during emissions tests than in actual driving. It later emerged that Ford was aware of the design flaw but had balanced the price of putting it right against the potential cost of paying out compensation for accidents. The heads of Volkswagen’s Porsche brand, Matthias Mueller; Audi brand, Rupert Stadler; and VW brand, Herbert Diess, are seen as the front-runners to succeed Winterkorn, three people familiar with the matter told Reuters.

On Wednesday, Volkswagen CEO Martin Winterkorn resigned and took responsibility for the “irregularities” found by U.S. inspectors — a scandal that has wiped out billions in the company’s market value and raised the possibility of criminal investigations and billions more in fines. The Volkswagen emissions scandal has rocked Germany’s business and political establishment and analysts warn the crisis at the car maker could develop into the biggest threat to Europe’s largest economy.

Take the Passat: A version of the mid-sized sedan that burns old-fashioned gasoline started at $21,340, while the “clean-diesel” model fetched at least $27,100. Many also dealt with a flood of angry calls, emails and tweets from Volkswagen owners who felt betrayed because they believed they had bought a car that polluted less without sacrificing the good gas mileage and performance that comes with a diesel engine. “I think their feet should be held to the fire. Dealers can’t give customers good answers because Volkswagen hasn’t said a whole lot, said AutoNation CEO Mike Jackson, the leader of the largest auto dealership chain in the U.S.

The German government said yesterday that the auto industry would remain an “important pillar” for the economy despite the deepening crisis surrounding Volkswagen. “Should automobile sales go down, this could also hit suppliers and with them the whole economy,” industry expert Martin Gornig from the Berlin-based DIW think tank told Reuters. Automobiles and car parts are also Germany’s most successful export – the sector sold goods worth more than €200 billion to customers abroad in 2014, accounting for nearly a fifth of total German exports. “I don’t think that the German automobile industry will be lumped altogether,” Commerzbank chief economist Joerg Kraemer told Reuters. “There won’t be a recession just because of a single company,” he added.

The German BGA trade association also tried to calm the public by saying there were no signs that customers abroad were starting to doubt quality and reliability of German companies. But he acknowledged there was a degree of concern among German companies that the scandal over cheating on US diesel emissions could have a domino effect on their businesses, eroding the cherished ‘Made in Germany’ label. While the German economy defied the euro zone debt crisis and, so far, the economic slowdown in China, it could now be facing the biggest downside risk in a long while from one of its companies. This took a lot of software programmers to put in place and keep in place.” At Volkswagen of Oakland, California, nearly two dozen new diesel cars have no chance of being sold in the short-term, while 25 2016 model vehicles are being held up at the Port of San Diego because they can’t pass emissions standards, sales manager Chris Murphy said. If Volkswagen’s diesels had been both cleaner and cheaper than competing models, consumers such as Sylvan might have wondered whether the “people’s cars” were too good to be true.

Volkswagen of America sent letters to California owners of diesel-powered Audis and Volkswagens in April, informing them of an “emissions service action” affecting the vehicles. We’ll probably hear a lot more about these price premiums in the months ahead, as attorneys stuff class-action complaints with drivers short on fahrvergnugen.

Owners were told they would need to take their cars to a dealer for new software to ensure tailpipe emissions were “optimised and operating efficiently.” The company did not explain that it was taking the action in hopes of satisfying government regulators, who were growing increasingly skeptical about the reason for discrepancies between laboratory emissions test results and real world pollution from Volkswagen’s diesel cars. We’re just one dealer,” he said, adding that diesel models make up about 30 percent of the business. “This is definitely going to impact our business.

We’re trying to focus on positive, not negative things because there’s nothing we can do.” Volkswagen has taken steps to help out the dealership, Murphy said. Volkswagen, which had no obligation at the time it initiated the recall to disclose the discussions that had led to it, declined to comment on the letter.

That includes guaranteeing reimbursement for sales objectives for two quarters whether or not the goals are met and waiving the interest the local franchise normally pays on unsold cars on their sales floor, he said. “They’re making all the right steps. … Lash Volkswagen of White Plains, N.Y., has been scrambling to accommodate affected Volkswagen owners by giving them loaner cars and picking up or dropping off their cars when it’s time for repair, said Tom Backer, general manager of the dealership in New York’s Westchester County.

Diesels make up less than 20 percent of his business and draw the most interest from customers looking for better gas mileage, he said. “We have 200 Volkswagens in stock; three of them are Jetta diesels,” he said. “So, it’s not like every Volkswagen out there has got a diesel motor in it.

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