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The Volkswagen Scandal – A Mucky Business

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Volkswagen’s reputation is now on the line for misleading the US Environmental Protection Agency (EPA). The automotive German car maker manipulated emissions data to make their cars appear more eco-friendly than they actually are….a shocking revelation? The scandal was realised on September 18th, when America’s EPA revealed that several diesel-engined VW’s and Audis had a software switched NOx-controlling technology on only when faced with the highly predictable sort of demands seen under testing conditions. NOx-emissions limit for a fleet of cars is 0.07 grams per mile (0.04g/km) and under normal conditions the VW cars were 40 times over the limit.

Volkswagen was ordered to recall around half a million cars in America to fix the software issue. On September 22nd Volkswagen admitted that 11 million vehicles worldwide has the same problem and needed to be recalled to fix the ‘’noticeable deviation’’.

What is consequence for Volkswagen Brand Reputation?

For the company this may result in a huge fine amounting to over $18 billion (£11.6 billion). What’s more, the VW’s brand core values – reliability and efficiency – are now tarnished, with Martin Winterkorn, VW Group CEO, admitting to “breaking the trust of (our) customers and the public.”

More than 3 million people die prematurely each year from outdoor pollution and without action deaths will double by 2050. This staggering revelation just shows how vital clean air is to the public’s health, and how Volkswagen’s unethical practises as a corporate brand are not to be taken lightly.

How is this going to affect UK motorist?

With 482,000 cars sold and a maximum fine of $37,500 per vehicle under the clean air act, the Department of Justice could in theory fine VW $18 billion. In practise this fine seems lot less severe as this is not the first time it has happened in the automobile industry. General Motors, ignoring problems with ignition switches that directly claimed 124 lives and got punished with a fine of $900 million in the US last month. In 2014 Toyota was fined $1.2billion when it had to settle a criminal investigation into its handling of unintended acceleration problems that resulted in 8.1 million cars being recalled.  I do not know the reason why most scandals are first spotted in the USA as it looks like with all the red tapes and regulations in the EU, none of these countries have the balls to enforce such emission problems within the region.

The UK government has now launched a programme to test a range of diesel cars which could lead to testing other types of emissions, such as carbon dioxide (CO2). Should in case it turns out that your car is affected, there are a couple of ways this may impact on you as vehicle excise duty (VED) is based on CO2 emissions. This can result in cost implication for British motorist meaning, you may end up forking out more for your road tax.

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Are cars being recalled?

Volkswagen is a brand that holds its corporate value really high, and it’s a go-to manufacturer when it comes to buying an efficient and reliable car – a known fact about country of origin effect planted in the minds of consumers in marketing. However, this may no longer be the case with consumers now having doubts about such great brands. According to the CEO of Volkswagen Group of America, Michael Horn, “We have totally screwed up”.  Now drivers may start thinking twice before buying a VW motor. I wonder what they would be doing to all their marketing materials such as datasheet and brochures – which had value preposition of efficiency, reliability and environmentally friendly cars as content? Your guess would be as good as mine….

With Volkswagen operation temporally ceased in the USA until all affected cars are recalled and fixed to guarantee accurate results, this is going to impact the company’s sales largely as thousands of Golf, Passat, Jetta and Beetle models are involved. This scandal has paved the way for authorities to also investigate other brands that fall under the Volkswagen Group umbrella, such as Audi, Skoda, Lamborghini, SEAT and Porsche as they might also have falsified emissions data. According to Greg Archer, clean vehicles manager for the European Federation for Transport and Environment, says “Exactly the same technology is used in Europe as it is in the US, and tens of millions of cars have been sold since 2009.” The European Commission has launched their own investigation and will also look at existing data provided by the EPA. This means that potentially millions of cars on British roads might have to be recalled and fixed to meet emissions standards.

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Will VW owners fail MOT’s if they ignore recall in the UK?

According to Patrick McLoughlin, the Transport select committee is considering plans to change MOT tests if people fail to respond to Volkswagen’s recall in wake of diesel emissions scandal. Volkswagen owners who ignore the recall of their vehicles following the diesel emissions scandal could fail their MOTs under plans being considered by ministers in parliament.  He told MPs that if there is a “wider problem” and people fail to return their vehicles he will consider changing MOT tests to ensure that “cars are operating legally and correctly”.

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