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Volkswagen’s Dieselgate

In September 2015, US authorities discovered that Europe’s largest carmaker – Volkswagen – had been using computer software to tamper with their emissions data during testing. This led to the departure of the head of their company, and a lawsuit.

VW is being sued by the US Justice Dept. for breaching environmental laws. VW has been ordered to fix almost 600,000 diesel vehicles in the country, along with €6.7 billion ($7.5 billion) set aside for covering the costs of the scandal. A US court has given VW until April 21st to devise a plan to fix all 600,000 vehicles. The court has stated that VW’s cars emit an “illegal level of pollution.”

VW plant in Wolfsburg - Getty Images
VW plant in Wolfsburg – Getty Images

After this “dieselgate” scandal, the Volkswagen brand is the only leading name to be hit by a fall in sales in January, posting a drop in Europe of almost 4%, as its competitors rise by almost double-digit percentages. The German media is now claiming that ex-VW boss Martin Winterkorn knew about the emissions rigging as early as May 2014, not in September 2015, as he claimed when the scandal became public and he was forced to step down.

Mr. Mueller – the current head of VW – told the BBC that it had been a “grave mistake… We have lost a lot of trust with our customers, and we now need to win them back”.

One benefit that many thought would come of the scandal was better regulation of emissions testing in Europe – something similar to the much stricter American model. The European Parliament tried to introduce a much stricter plan, but eventually caved into national car industries, and passed a watered-down version of the original plan.

VW is currently tasked with coming up with a transparent plan for the future, which has been postponed by them multiple times. It is unclear how the courts will take another postponement after their April 21st deadline.

 

Jonathan Abraham

BBC: http://www.bbc.com/news/business-35605089

BBC: http://www.bbc.com/news/business-35894378

 

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