VW under pressure to give details of car refit plan

Volkswagen is under pressure to give details within the next week of its plan to refit up to 11 million diesel vehicles, with its US chief due to testify to lawmakers next Thursday and German regulators also demanding swift action.

The German carmaker needs to fix software that allowed it to cheat emissions tests, the discovery of which has sparked the biggest business crisis in its 78-year history.

The scandal has wiped more than a third off Volkswagen’s share price, forced out its long-time chief executive and rocked both global car markets and the German establishment.

It has also exposed inadequate regulations, particularly in Europe where the importance of the car industry to jobs and exports has given it a powerful voice in policymaking.

“Consumers are rightly aggrieved and frustrated. Politics must no longer tolerate this situation in such an important consumer market,” Klaus Mueller, head of the Federation of German Consumer Organisations, told Reuters news agency.

Volkswagen, Europe’s biggest carmaker, said on Thursday it would take months to get to the bottom of who was responsible for the software, although it promised to “inform the public in regard to solutions found for the problems next week.”

But analysts say it could be a challenge to do the refits without leaving vehicles with diminished fuel economy and performance, or requiring more maintenance – problems that could potentially multiply lawsuits against the company and further sully its reputation.

In a sign of the complexity, Belgian car importer D’Ieteren told Reuters it had not heard any technical details about the refit yet, and that Volkswagen had committed only to having a plan set by the end of this month.

Volkswagen said today it was taking time to come up with solutions because automatic and manual vehicles and models with different engine categories needed different fixes.

In the coming days, the carmaker will launch country-specific websites where customers can enter details of their vehicles to find out if they are affected, it said.

Volkswagen shares, which have lost more than $30bn in value since the crisis began, fell to a new 4-year low of €90.70 today.

Meanwhile, Volkswagen is being left behind by its rivals in the US as they capitalise on rapid growth in car sales.

September figures show its main rivals General Motors, Ford and Fiat Chrysler all posted increases in sales of more than 10% during the month.

VW sales did rise during the month, but by only 0.6%.

The emissions-cheating scandal that affects over 11 million Volkswagen cars sold worldwide, 500,000 of them in the US, emerged just two weeks ago.

It comes as the US car market appears to be taking off again.

Yesterday it emerged that VW is to recall almost 80,000 cars sold in Ireland as part of the scandal.

In a statement the company said individual customers will be contacted about what it called its “action plan to correct the emissions characteristics of certain diesel vehicles”.

The recall here will involve 34,387 Volkswagen passenger cars, 16,485 Audi cars, 4,365 SEAT cars, and 16,004 Skoda cars.

The recall will also include 8,107 commercial vehicles sold under the Volkswagen brand. In a further clarification, the company said an additional 30,000 cars may be recalled.

These are understood to be imported second-hand cars. The company is to set up an online service for customers to check if their car will be affected.

Source: AFP/Reuters