Emis­sions test­ing cre­at­ing bot­tle­necks in the in­dus­try

IN­DUS­TRY NEWS/ Volk­swa­gen de­lays cars as new emis­sions test stops fac­to­ries, writes Michael Tay­lor

Business Day - Motor News - - MOTOR NEWS -

Prob­lems squeez­ing enough of its cars through the new WLTP emis­sions test forced Volk­swa­gen to warn share­hold­ers re­cently not to ex­pect big profit leaps this year.

Though it re­ported healthy rises in sales, rev­enues and prof­its in the first half of the year, Volk­swa­gen Group chair­man Her­bert Diess warned in­vestors not to ex­pect a sec­ond half surge.

He cau­tioned that up to a quar­ter of a mil­lion cars would suf­fer pro­duc­tion de­lays, at a cost of bil­lions of eu­ros, be­cause of Volk­swa­gen’s dif­fi­cul­ties get­ting its cars cer­ti­fied on the WLTP test.

The World­wide Light Duty Ve­hi­cles Har­monised Test Pro­ce­dure (WLTP) is much harder to com­ply with than the out­go­ing NEDC test.

Car­mak­ers have to test not just each new model, but each ex­am­ple within a model range, in­clud­ing all dif­fer­ent en­gines, gear­boxes, tyre sizes and dif­fer­ent com­bi­na­tions of all three.

The WLTP even de­mands new tests for dif­fer­ent air-con­di­tion­ers, dif­fer­ent sus­pen­sion sys­tems, dif­fer­ent brake pack­ages and mi­nor equip­ment level changes in a chase for more ac­cu­rate fuel con­sump­tion and emis­sions data for cus­tomers. Each test takes about 48 hours and must be con­ducted at pre­cisely 21° C.

Ef­fec­tive for all new cars sold in Europe from Septem­ber 1 2018, it is ex­pected to hit car­mak­ers hard across Europe, in par­tic­u­lar, with Daim­ler, the Volk­swa­gen Group, BMW and Re­nault all ad­mit­ting not all of their mod­els will be cer­ti­fied in time for the WLTP’s ar­rival.

A ma­jor is­sue for car­mak­ers is that the en­tire sup­ply of the con­ti­nent’s cer­ti­fied test benches is booked solid through to the end of 2019 by brands des­per­ate to get their new cars on sale. Any model, or spec­i­fi­ca­tion of a model, that hasn’t been cer­ti­fied by Septem­ber 1 won’t be able to be sold, even if it’s been on sale be­fore that date.

“The Volk­swa­gen Group per­formed suc­cess­fully in the first half of the year, with very solid growth in sales rev­enue and earn­ings. We also de­liv­ered more ve­hi­cles than ever be­fore,” Diess said.

“How­ever, we can­not rest on our lau­rels be­cause great chal­lenges lie ahead of us in the com­ing quar­ters — es­pe­cially re­gard­ing the tran­si­tion to the new WLTP test pro­ce­dure.

“Grow­ing pro­tec­tion­ism also poses ma­jor chal­lenges for the glob­ally in­te­grated au­to­mo­tive in­dus­try,” he said.

Volk­swa­gen’s WLTP bot­tle­neck isn’t helped by the se­nior pow­er­train ex­per­tise wiped from the com­pany in the wake of Diesel­gate. “En­gine de­vel­op­ment ex­per­tise has been lost,” Diess ad­mit­ted.

“That im­pacts ca­pac­ity util­i­sa­tion at our plants, so there will be clo­sure days at our sites dur­ing this pe­riod,” he said.

“One thing is clear, though: this will be a titanic task for the sec­ond half of the year, par­tic­u­larly on the mar­gin side.”

The car­maker re­cently hired BMW’s en­gine de­vel­op­ment guru (and a for­mer col­league of Diess’s), Markus Dues­mann to help with the strug­gle.

Even with Diesel­gate costs rip­ping €1.6bn out of its bot­tom line in the first half of the year, the group still de­liv­ered 5.5 mil­lion ve­hi­cles, ris­ing 7.1% on 2017’s first half.

“Over the com­ing months, we will do ev­ery­thing in our power to val­i­date the trust of our cus­tomers world­wide,” Diess in­sisted. “Our stated goal is to trans­form Volk­swa­gen into our in­dus­try’s lead­ing com­pany in terms of prof­itabil­ity, in­no­va­tive power, sus­tain­abil­ity and cus­tomer sat­is­fac­tion.”

The com­pany’s sales rose to €119.4bn, with a bil­lion euro rise in op­er­at­ing profit to €9.8bn.

“The first half of the year showed that the group has a solid op­er­at­ing and fi­nan­cial base,” Volk­swa­gen Group fi­nance and IT board mem­ber Frank Wit­ter said.

“How­ever, as com­mu­ni­cated sev­eral times be­fore, we need to pre­pare a volatile sec­ond half of the year, par­tic­u­larly due to the WLTP,” he said.

“We are work­ing at high pres­sure on fur­ther mea­sures to keep the ef­fects on our pro­duc­tion as low as pos­si­ble,” Wit­ter con­cluded.

From Septem­ber 1, all ve­hi­cles on sale in Europe must have been tested to the new World­wide Light Duty Ve­hi­cles Har­monised Test Pro­ce­dure emis­sions reg­u­la­tions.

The Volk­swa­gen Group is one of may car­mak­ers fac­ing sales de­lays due to the new emis­sions tests in Europe

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.