The nightmare will continue for years, just as it did for the banksby Jonathan Evans / October 6, 2015 / Leave a comment
The German car industry is an extended family, in which chief executives regularly move between the top slots at VW, Porsche and Mercedes. True to form, in the wake of the recent emissions scandal at Volkswagen, it was the head of Porsche who took over on the resignation of Martin Winterkorn, the boss of VW. So the recent emissions scandal is a blow not just to VW but to the German motor industry as a whole.
Indeed, how did it happen? Volkswagen is the best selling car company in the world. It is well represented for its luxury and lower end models, and is strong globally. Waitrose car parks might be full of VWs but so are Walmart’s, and on a recent visit to Shanghai I was struck by the prevalence of VWs. So why put it all at risk by cheating on emissions?
One answer lies in the characteristics of diesel engines. Diesels have always been more popular in Europe than in the US, and in recent years have been seen as a convenient way to reduce carbon emissions—but they do have a dirty little problem. They emit things that are bad for our health, increase smog and interfere with the development of some animals’ sensory abilities, especially bees.
In the European anti-carbon frenzy of a few years ago, when policymakers were keen to increase the uptake of diesels, these “particulate” problems were ignored, but US regulators were less amenable and imposed a tougher compliance regime. Conveniently, this raised an additional barrier to entry to the US market for diesel cars that are predominantly manufactured by non-US companies. In order to meet these tougher requirements, manufacturers had to fit more effective anti-emissions systems to their diesel cars, but these made them less responsive to drive and therefore harder to sell. We still do not know who in VW decided that the way to tackle this was to adapt the engine management software so that the cars passed the tests when necessary but still enjoyed the responsiveness of an unrestricted engine when on the road. Whoever it was is likely to need a good lawyer.