The Volkswagen scandal fall-out

Many column inches have been devoted to analysing the issues surrounding the Volkswagen emissions scandal, but what are the real issues for owners of affected vehicles?

If you have been living out of sight of newspapers and out of earshot of televisions and radios, the scandal hit the headlines last week when Volkswagen admitted it had programmed some of its cars to recognise when they were being tested and to operate in a reduced emissions mode.

Car emissions

It certainly is quite shocking when the world’s biggest car manufacturing group admits to dishonesty on this scale. From a public relations perspective, it will take some time for Volkswagen to re-establish trust with consumers, governments and regulatory bodies.

To its credit, Volkswagen decided to come clean. Volkswagen’s boss in the USA was quick to admit his company was dishonest and candidly added: “We have totally screwed up”. Martin Winterkorn, the Volkswagen Group Chief Executive, resigned.

The big question for Volkswagen owners is what happens now.

Volkswagen has said it will refit up to 11 million vehicles that have the illegal software – a programme that some analysts have said could cost the Volkswagen Group $6.5 billion. Germany’s KBA watchdog has given the group until October 7 to come up with a refit plan.

UK owners of affected vehicles are expected to hear next week if their cars are affected. Volkswagen has revealed that more than a million vehicles are affected in the UK – 500,000 Volkswagens, 400,000 Audis, 132,000 Skodas and 77,000 Seats.

Quite apart from the sheer logistics of developing a solution and instigating the massive refit programme, there are many questions about how this scandal will affect car owners.

  • Will the scandal reduce the value of affected vehicles?
  • Will the performance of cars be affected?
  • Are there tax issues to consider?

There are indications that the value of affected vehicles has already reduced. It’s reported that Glass’s Guide – the motor trade used car value bible has recorded an increase of over 2% in the value of diesel vehicles overall this month. But, Volkswagen diesel values have stayed static, meaning an effective reduction in value, compared to others, of around that 2% margin.

If the value of your car is reduced due to the actions of the manufacturer, you are likely to knock on the door of the manufacturer or their dealer to seek compensation for that reduction. How do Volkswagen plan to deal with that issue?

Given that the purpose of the illegal software was to allow the diesel power unit to behave differently under test conditions and yet produce higher power (and greater emissions) when not under scrutiny, it is fair to assume that any refit may involve a reduction in the performance of the car.

How would you feel if your car no longer performs as well as it used to?

My guess would be that you would be going back to the manufacturer or dealer to complain that your car is no longer as described when you purchased it.

Given that motor tax in the UK is very closely tied in to vehicle emissions, specifically CO2 emissions. Will these be affected by the unfolding story and the refit programme?

What happens if vehicles have been incorrectly taxed due to false figures from the illegal software?

It may well be that CO2 emissions were not affected by the emissions-cheating software. My impression is that it has been aimed more at reducing emissions such as nitrous oxide.

Finally, there are wider questions about whether other manufacturers have also been fiddling the system and what this whole debacle will do to the current arguments about the real-world emissions of diesels – as seen in the debate about banning diesel vehicles from the London congestion charge zone.

STOP PRESS: UK Transport Secretary has, today, confirmed that “no-one will end up with higher tax costs as a result of this scandal.”
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