Motor Continental Blog

A Volkswagen engineer has admitted and pleaded guilty in a US court to helping to trick it's customers and the US government for almost 10 years by installing "defeat devices" in Volkswagen vehicles that would reduce the emissions when being tested for them.

When on the road, however, Volkswagen diesel vehicles would produce much higher emissions than are allowed.

According to the engineer, he worked on the new "EA 189 diesel engine". However, later on he realised that the engine could in no way meet the US environmental standards.

To fight the problem, the engineers designed a "defeat device" and "defeat software" that was engaged, when testing for emissions.

US prosecutors say that "as part of the certification process for each new model year, including model years 2009 through 2016, the co-conspirators continued to falsely and fraudulently certify to EPA and CARB that VW diesel vehicles met US emissions standards and complied with the Clean Air Act"

"Liang admitted that during this time, he and his co-conspirators knew that VW marketed its diesel vehicles to the U.S. public as "clean diesel" and environmentally-friendly, and promoted the increased fuel economy."
The engineer can face up to 5 years in prison for conspiring, however, by working with the US governent, he can potentionally reduce his sentence.

The Volkswagen Emission Scandal

On the 18 September 2015 the Environmental Protection Agency (EPA) revealed that Volkswagen manipulated emission tests with a special software to achieve better results and boost their sales.

The software is able to detect if the car is in a test environment so it can lower the performance of the engine to improve the emission results. Originally it was believed that the  software was only installed into 1.4-2.0 litre diesel motors but on the 2 November a new allegation came out. The Environmental Protection Agency (EPA) claims that the 3 litres diesel motors are also affected by the manipulation. That includes cars from Audi and Porsche.

Later it was found out that not only cars in the United States were affected. According to Volkswagen 11 million cars were built with the software and 8,5 millions of those were sold in the EU. There are a lot of investigations in many different countries because of the scandal. Volkswagen could get fined billions.

As a consequence of the scandal the Volkswagen CEO Martin Winterkorn stepped down and other managers were on leave. His successor is the former Porsche CEO Mathias Müller.

The value of Volkswagen shares dropped more than 60% and the image of the company took a big hit. Volkswagen responded by recalling millions of cars worldwide and putting £4.8 billion aside to cover upcoming costs. This and the falling shares resulted in a loss of €2.5 billion, the first loss the company has made in the last 15 years.

Unfortunately  for Volkswagen the costs can exceed their expectations since the EPA alone can set a maximum fine of $18 billion. VW themselves admit that costs of possible legal action by car owners and shareholders “cannot be estimated at the current time.” 

Volkswagen overtook Toyota in global sales for the first half of 2015.

Toyota said on Tuesday it sold 5.02 million vehicles in the six months through June, less than the 5.04 million VW said it had sold in the same period.

The reversal in market positions comes three years ahead of Volkswagen’s target to overtake its Japanese rival by 2018.

Volkswagen's chairman Ferdinand Piech has resigned from his role as chairman.

He resigned at the weekend with immediate effect following a clash with key directors.

Volkswagen stock surged more than 4 per cent in early trading on Monday as shareholders bet his resignation will herald improvements in corporate governance and shareholder returns.

There are also rumours that Volkswagen may make a move into F1 as Piech has in the past been the stumbling block due to a personal feud with F1 chief Bernie Ecclestone.

Ferdinand Piech shaped the company's destiny for more than 25 years. He rescued Volkswagen's fortunes as CEO from 1993 to 2002 and he then served as a powerful board chairman.

Time will only tell if this is a good move for the company or not, watch this space!

Jochem Heizmann, head of Volkswagen Group China has said that Volkswagen will be offering Chinese drivers in excess of 20 NEVs soon.

In the past week Volkswagen has recalled a number of vehicles. They are recalling over 18,000 model-year 2009 Routan vehicles and over 151,000 model-year 2009-2014 Tiguan vehicles.

The Routan has an issue with the ignition, Volkswagen will notify owners, and dealers will modify the ignition switch, free of charge.

The Tiguan has an issue with the fuel system but only in certain conditions. Bubbles can form in the the fuel system if winterized fuel is used, Volkswagen will notify owners, and dealers will update the vehicle's software to increase the fuel pump pressure, free of charge.

Volkswagen have announced that they will be adding two car making facilities in China. They will be located in the eastern Chinese city of Qingdao and the northern city of Tianjin.

Volkswagen have decided to show their e-Golf and e-Up models that are run entirely on electric at the Frankfurt show next month. Both are due to go on sale in 2014.