The start of the death of VW USA?

[GadgetGav]

So the emissions cheating spans nearly half a million 'Clean Diesel' vehicles across VW and Audi and could result in fines of $18bn...
We all know that there will some kind of bargaining, so the fine probably won't be anywhere near that amount, but VW Group have really been pushing 'Clean Diesel' in the US while other manufacturers have gone for more hybrids and plug in hybrids. I read one report that said diesels amounted to 20-25% of VW sales last year and currently they're not allowed to sell any.
Could this be the beginning of the end for the VW brand in the US market? Even once they get permission to sell the diesels again, what will the effect on performance and / or economy be to actually make a 'Clean Diesel' clean? Even if they could make cars with the same specs at the same price that really passed the tests, is the image too much to overcome now? I doubt the company can afford to lose 20%+ of their sales and they don't seem to have had much success in selling their first EV compared to things like the Leaf.

All in all I worry for the future of the company behind my car. Never was I happier to be in a lease and not relying on VW to be there to back the 8 year battery warranty. (Although what happens at the end of the lease if they're not there to take the car back?)

 

[RonDawg]

Keep in mind that VW is one of the largest car companies on earth (when you consider all the VAG brands) and could even afford to lose $6.25 million on each Bugatti Veyron it sold.

I doubt that VW will end up paying $18B when this is all said and done. GM intentionally ignored a defect that actually killed people, as did Ford, and they didn't pay anything near as much in fines and civil penalties.

If Mitsubishi can hang on in the USA this long, so can VWoA.

 

[GadgetGav]

Yes, the VW group as a whole is close to being the biggest car maker in the world by sales volume, it's a close contest between them and Toyota, but that's not to say the VW brand in America is safe from the fallout of this. The Bugatti Veyron was a halo car so the losses on that project are not comparable to the business decisions behind a brand that sells sedans and SUVs to ordinary people.

As I said, I don't think anyone expects that they will pay the possible $37,500 fine per car which is where the $18bn figure comes from, and even if they did it might not be enough to kill the whole group financially.

My point is more about the marketing / public perception. They have built more than 20% of the VW brand in America (and more in Europe) on the TDI and 'Clean Diesel'. Now we know that has been a lie, how quickly can they ramp up EVs and hybrids in their range? They were saying at the Frankfurt show just before this news broke that they will have an EV option across their entire range within a few years, so I wonder if that can be accelerated.

The public can't currently buy a TDI and when the 'stop sale' order is lifted will they want to? The repercussions on used TDI prices may well sour current owners on the VW brand. Maybe you're right RonDawg and the public is so used to corporations lying and getting away with it that there won't be a noticeable affect on sales. However, the unintended acceleration problems with Audis in the mid 1980s led to a collapse in their sales (and resale values). They lost about 85% of sales and took years to recover.

What's probably more likely IMHO is that this is not just something that VW does and it does not just affect diesels. Once we find out that every manufacturer has been cheating the rules and the certifying bodies don't actually test many cars at all (around 15% for the EPA) then maybe this just becomes 'one of those things' and we all move on.

 

[GadgetGav]

Boom..! Now it's 11m vehicles worldwide.
Still more shoes to drop I think

 

[miimura]

Boom..! Now it's 11m vehicles worldwide.
Still more shoes to drop I think

There was never any doubt in my mind that this was engineered into the car from the start and was not just affecting US models. Every country that has NOx regulations similar to the US and Europe will have a problem with these engines.

 

[GadgetGav]

The thing is though, the regulations say you have to pass the EPA (or equivalent European) test. They don't say you have to maintain those levels at all times in all conditions in the real world. Everyone knows that you never get the EPA rated fuel economy from a car, and there's little that's done about that (there was some compensation from one manufacturer I think) so is this really any different..? Is it the test that is the problem?

 

[cynandvinecar]

Not the death I'm sure but certainly a blow to the brand and it's public perception.

We leased an eGolf when it was first available last year, after three months collaboration with VWoA and GmbH trying to get it to work as advertised (we needed delayed charging and it never worked) VW finally bought it back from us repaying every penny spent, installed a new EVSE unit even offering to pay for the power used.

We thought wow, what a decent way to take care of the customer. Now, I will not own another VW.
It appears clear they are prepared to do whatever it takes to get a car into the US market. The eGolf was half baked when released here, the software useless (I guess they're better at writing code for ICE's), the infotainment system second tier, simple features like an illuminated charging port, remote garage door opener not there etc.

The "Clean Diesel" issue however is far worse, a willful program to defeat smog tests has no excuse. I can only hope that current owners of VW diesel engine cars get treated as well as we did, no matter what the $ cost.

 

[RonDawg]

What's probably more likely IMHO is that this is not just something that VW does and it does not just affect diesels.

I very much agree with you. This is just the tip of the iceberg. Hyundai/Kia already proved they could fake MPG results, as did Ford with the Energi series, so faking emissions results was not all that difficult to fathom.

 

[RonDawg]

The eGolf was half baked when released here, the software useless (I guess they're better at writing code for ICE's), the infotainment system second tier, simple features like an illuminated charging port, remote garage door opener not there etc.

The Leaf wasn't a whole lot better, especially for its first two model years. The navigation system is (still) horrible, there was no charging port light until the 2013 model year, and the CarWings system (similar to CarNet) will become useless at the end of 2016 when AT&T shuts off 2G service, with no remedy ever announced by Nissan.

The worst though was Nissan was caught in its own lie when it was discovered by Leaf owners in hot weather climates like Phoenix that the batteries were degrading faster than Nissan had originally claimed. Originally there was no premature degradation warranty, and I even signed papers acknowledging that the batteries would eventually degrade and that there would be no warranty regarding that.

It took a class action lawsuit called Klee v. Nissan North America before Nissan retroactively offered a premature degradation warranty, but it only covered the more extreme degradation cases (loss of at least 34% capacity within 5 years/60k miles of original in-service date). Those who opted out of the lawsuit were actually excluded from this warranty extension, and their cars branded as such, until very recently when they were allowed to opt back in.

 

[GadgetGav]

The eGolf was half baked when released here, the software useless (I guess they're better at writing code for ICE's), the infotainment system second tier, simple features like an illuminated charging port, remote garage door opener not there etc.

It's all a matter of perspective I suppose. I had a 2010 GTI prior to the eGolf and I think the infotainment system is a big improvement. The screen responds to touch a lot faster and there are other improvements across the system. If by 'the software' you mean CarNet, that's outsourced. It's not good, but I pretty much never use it and it doesn't affect my use of the car as a car. It's true there's no garage door opener, but if I remember correctly, the GTI didn't have one either and I know for sure my car before that (Mini Cooper S) didn't. The VW Golf is not a luxury brand, so there are certain features that are going to be kept as bells & whistles for the higher spec or 'luxury' badged models.

 

[cynandvinecar]

The eGolf was half baked when released here, the software useless (I guess they're better at writing code for ICE's), the infotainment system second tier, simple features like an illuminated charging port, remote garage door opener not there etc.

It's all a matter of perspective I suppose. I had a 2010 GTI prior to the eGolf and I think the infotainment system is a big improvement. The screen responds to touch a lot faster and there are other improvements across the system. If by 'the software' you mean CarNet, that's outsourced. It's not good, but I pretty much never use it and it doesn't affect my use of the car as a car. It's true there's no garage door opener, but if I remember correctly, the GTI didn't have one either and I know for sure my car before that (Mini Cooper S) didn't. The VW Golf is not a luxury brand, so there are certain features that are going to be kept as bells & whistles for the higher spec or 'luxury' badged models.

This topic is concerning the future of VW in the US in light of the "clean diesel" scandal. I was using my experience of owning the eGolf as an example of a vehicle put onto the market by a company that seems prepared to advertise features that dont work, or in the case of the TDI, are illegal.

I got one of the very first eGolf's on the West Coast and very much wanted it to work (my posts go back to Nov of last year although we got the car in Oct). I even convinced my wife to wait until it was available (she wanted a Fiat 500 EV!), and understood that it was a new car, in a new market for VW (at least in the US) and that the infrastructure and technical knowledge at the dealer level would be minimal.
However, after spending I have no idea how many hours in 3 months working with VW trying to help them fix software issues (not just delayed charging) we gave up, in fact VW offered to buy the car back, I didn't suggest it. Perhaps delayed charging isn't important to you, but it was to us because we have tiered rates from SCE and I got tired of getting up at 11pm to see if the car was charging. We now have a BMW i3 and they sensibly put the charging options in the car where they belong, not on some phone app.

I am not a VW "hater" I've had others in the past and enjoyed owning them (except after the third time the Blaupunkt radio was stolen from my Scirocco!).
But this TDI debacle has re-framed my opinion of VW, and even if other manufacturers are proven to have done the same thing, it will be a long road to recovery for the VW brand.
Lastly, and I apologize for the long reply, I'm really PO'd that this will probably prevent VW from buying the Red Bull F1 team as they had reportedly been looking into.

 

[GadgetGav]

Lastly, and I apologize for the long reply, I'm really PO'd that this will probably prevent VW from buying the Red Bull F1 team as they had reportedly been looking into.

I was thinking about that too. The brand is certainly tarnished right now and it seems like the deal with the Red Bull F1 team needs to be done soon as they've very publicly ditched Renault. Maybe it would be something of a path back as the F1 power plant is a hybrid system now... Volkswagen Group could still buy the team and use a different brand on it though - there are rumors of Audi being in F1 by 2017, so maybe they accelerate that plan. I also wonder whether it will affect the branding /marketing of the Audi TDI hybrid WEC team?

 

[Jlo]

The Diesel was my plan B vs. the eGolf, money and rep wise it'll suck for VW, for us customers that DON'T have a Diesel...good news! Super cheap Diesels are coming!

My opinion, (notice I said "opinion") this emissions thing in some sort of business espionage thing, think about it...how would someone find out the facts. Who would sit there and compare the emissions during the smog test and then after (but not as a "test")? VW was starting to put a dent on other "e" for "environmental" self-reported car companies. I mean, the e-Golf was second to the Tesla S...a car that costs at least 3 times as much...(awesome car btw) In any case, shame on VW, there's no way around the tomfoolery.

I would hope business sense would prevail, VW ponies up the fines, makes it right with customers and gets those electrics, hybrid electrics and hybrids out ASAP! Go all in!

VW is only bruised on the second round of a 12 round match...10 more rounds to go folks. As a customer, I'm watching.

 

[jmmurphy26]

Not sure about the espionage part. Here's a story i read on NPR last week.

http://www.npr.org/2015/09/24/44305...in-west-virginia-caught-volkswagens-big-cheat

But really, what are the chances that the guy who commissioned the report has the last name "German"?

 

[Skryll]

Not sure about the espionage part. Here's a story i read on NPR last week.

http://www.npr.org/2015/09/24/44305...in-west-virginia-caught-volkswagens-big-cheat

But really, what are the chances that the guy who commissioned the report has the last name "German"?

Lol, no he is legit, I know him, he's Jane Does brother

Just kidding, but Musk got it right just in time:

 

[user 241]

The eGolf was half baked when released here, the software useless (I guess they're better at writing code for ICE's), the infotainment system second tier, simple features like an illuminated charging port, remote garage door opener not there etc.

It's all a matter of perspective I suppose. I had a 2010 GTI prior to the eGolf and I think the infotainment system is a big improvement. The screen responds to touch a lot faster and there are other improvements across the system. If by 'the software' you mean CarNet, that's outsourced. It's not good, but I pretty much never use it and it doesn't affect my use of the car as a car. It's true there's no garage door opener, but if I remember correctly, the GTI didn't have one either and I know for sure my car before that (Mini Cooper S) didn't. The VW Golf is not a luxury brand, so there are certain features that are going to be kept as bells & whistles for the higher spec or 'luxury' badged models.

I side with GadgetGav's perspective.

 

[JoulesThief]

I'm of the opinion that CARB is out for outright banning diesels, that they pulled a requirement for NOX that they never sought input from the engine manufacturers on, to even know if it was acheivable and doable. NOX, in direct sunlight supposedly has a half life of just under 4 hours. And it takes other items in the air to react with NOX to make it a problem, and only in high density city areas... there's a lot of rural land and non city area in California, where NOX will never be an issue.

CARB pulled a number out of the air for NOX requirements, knowing it would probably too low and therefore unobtainable, for the majority of type of diesel engine operating conditions, and being known haters of diesel, they pretty much made it impossible. In my opinion, their requirement never was feasible, the goal they deliberately set was unobtainable, something to make the green people diesel haters happy.

 

[RonDawg]

VW to buy back some of the affected cars: http://www.thetruthaboutcars.com/2016/02/volkswagen-is-buying-back-dirty-diesels-but-not-from-owners/

However they will (so far) only do so from authorized VW dealers who have the first-gen (non-AdBlue) 2.0L TDI vehicles in their inventory as Certified Pre-Owned. They have not announced what they are going to do with AdBlue vehicles, or non-CPO'd cars, or cars owned by individuals and businesses other than VW dealers.

 

[JoulesThief]

VW to buy back some of the affected cars: http://www.thetruthaboutcars.com/2016/02/volkswagen-is-buying-back-dirty-diesels-but-not-from-owners/

However they will (so far) only do so from authorized VW dealers who have the first-gen (non-AdBlue) 2.0L TDI vehicles in their inventory as Certified Pre-Owned. They have not announced what they are going to do with AdBlue vehicles, or non-CPO'd cars, or cars owned by individuals and businesses other than VW dealers.

This is all speculation on my part, but I am of the opinion that VW will end up buying back the first generation clean diesel jetta's, golfs, Beetles, and Sportwagens that are not equipped with SCR ad blu exhaust treatment, pretty much because there is no economical change or retrofit they can come up with that will satisfy CARB. The remaining SCR equipped Ad Blu 2012-2015 and 2016 passats, and 2009 to current V6 3.0L TDi Touaregs, Audi lineup (A6, A7, A8, Q5 and Q7) and Porsche Cayenne and Macan will probably get a fine per car to make the government and it's people "whole" as they are a lot closer to being in compliance, and will probably have to go in for a reflash of software. I can't imagine the software making the car as whole performance wise, as it was on the test drive before you bought it, or the MPG as good as the tune that came on the car.

Again, all the above is just my opinion... time will tell how it all plays out. Owning a 2014 Passat TDI and a 2012 TDI Touareg and a 2013 TDI Touareg, I've more than felt the loss in potential resale value for supporting VW... and I am NOT happy about their disingenuous "claims" about clean diesel, the value of these diesels on the resale market will forever be tarnished, with depressed resale values. Sending $500 Voucher Debit cards, that VW can use to track how you spend the money, and $500 Voucher VW money only good at VW dealerships, to keep the dealership happy with a cut of the business from lost business due to the parent company actions, is no where near enough to cover the losses in value right now... people don't trust VW any more. And it will be a very, very, very long time before they even come close to earning that trust back from the consumer.

 

[RonDawg]

Even if VW does buy back non-AdBlue cars from all owners, many of these cars are no longer owned by their first buyers and the present owners don't necessarily have the financial means to buy a new or recent model used car. Or they were able to afford it easily when the car was new but aren't as financially well-off today but expected this car to last them for quite some time (e.g. someone who bought the car new just before retirement).

There isn't a lot of precedent about manufacturers buying back entire batches of cars because of a defect. I remember in the mid 90's when Nissan USA was forced to buy back its Nissan Van (pre-Quest) which was hastily introduced to the American market to compete with Toyota's popular van. To make its performance more acceptable to Americans and especially American demands of comfort (i.e. air conditioning and automatic transmission), Nissan fitted the 2.4 liter engine from the Hardbody pickup. Problem was that the van's engine bay was never designed for such a large powerplant and thus frequently overheated, sometimes to the point of catching fire Nissan eventually offered to buy any remaining vans back; I remember when I was having my '96 Maxima serviced I saw a bunch of these vans sitting in an empty field next to the dealership, waiting to be flattened.

A more recent example is the Ford Windstar, which Ford offered to buy back in some states because of premature corrosion to a suspension part and the rear beam axle. The parts are long out of production and in low stock, and Ford feels it's cheaper to buy back existing vans than to restart production of these parts for such a limited quantity.