Whither Volkswagen?
> Europe’s largest automaker ponders its future after ‘diesel-gate’ scandal crashes sales globally
WOLFSBURG: Sales in some markets have already taken a nose-dive at Volkswagen (VW). Despite major reshuffles among management and technical staff, the carmaker is struggling to shake the fact that it was caught out for blatantly cheating the regulators.
VW – makers of the world-famous Golf model – will now have to pay out a fortune to save its reputation. The company also faces a raft of potentially ruinous lawsuits from angry owners.
Industry experts say the scandal could cost the company as much as US$30 billion (RM129 billion). VW has set aside billions to pay for repairing the diesel engines it manipulated to pass emission tests in the United States and Europe. An estimated 11 million vehicles are affected worldwide.
Workers at VW’s main factory in the prosperous town of Wolfsburg are meanwhile getting nervous. There are rumours of shortterm working next year and a sales slump which could cost jobs. Just how badly “dieselgate” has affected sales of VW’s core marque and its sibling Audi, Seat and Skoda cars will become evident in the next few months.
The new “Strategy 2018” was the brainchild of the company’s long-serving boss Martin Winterkorn and VW supervisory board boss Ferdinand Piech. There was little love lost between the two automotive giants but Piech seemed to respect Winterkorn’s achievement in having boosted sales and global staff to 600,000 since taking over in 2007.
The VW concern was ruled then from Wolfsburg in a centralistic and rigid manner but also from Salzburg is Austria where Piech resides.
Long before emissions-rigging hit the headlines, Piech and Winterkorn became embroiled in a mud-slinging match in April after Piech expressed his opinion to Germany’s Spiegel magazine in one brief sentence: “I am distancing myself from Martin Winterkorn.”
As the magazine was hitting the newsstands, serious doubts had already been cast over the future leadership of Germany’s flagship carmaker. A row about VW’s poor performance in the US was blamed for the ructions but it appeared that Piech had lost faith in Winterkorn to steer the company to automotive market domination.
An alliance between major VW shareholders, the state of Lower Saxony, and the company’s powerful worker’s representative council backed Winterkorn. Piech, 78, had to stand down. It was all smiles when Winterkorn talked to journalists at the glamourous IAA car show in Frankfurt in September but shortly afterwards the bombshell exploded.
The carmaker was accused of using illegal software to ensure its cars passed stringent emission tests in the US. VW admitted the accusations almost straight away. What went wrong? In 2005/06, VW had a hard struggle selling cars in the US. Arch-rival Toyota was much more successful, thanks in part to its innovative, petrol-electric hybrid Prius. VW opted for clean diesels instead. It was a challenge but VW engineers found what seemed to be a simple solution: They tampered with the software to make diesel engines pass benchmark tests and hailed the miserly fuel economy they could deliver. Exactly when engineers cottoned on to the idea of what has become “diesel-gate” is unclear.
Winterkorn said he knew nothing about it but the 68-year-old resigned shortly after the revelations were made public. His successor is former Porsche boss Matthias Mueller – the man Piech had originally wanted to see steering VW. Mueller is a troubleshooter but whether he can clear up diesel-gate is another matter.
The cheap black plastic pipe fix which VW plans to retrofit to European diesels affected by the software-rigging has been dismissed by some industry pundits. The mesh inside improves the air flow and creates optimal combustion, says VW. There’s no word on whether it will impede fuel efficiency or engine output.
Christian Hetzner, Automotive News Europe’s Germany correspondent, said the low-tech part looks like something a plumber might use to fix a clogged sink. Hetzner says the fix must work because – with the eyes of the world on it – VW would not dare to announce a fix that does not.
A solution for blighted US diesels is expected to be much more costly. But VW has to save money. Investment has already been slashed by 1 billion annually. And it remains to be seen how powerful the brand is among customers despite a rocky past year.– dpa