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Saturday, 14 December

Road to Hell Paved with Bad Intentions

The ramifications for the car industry over the Volkswagen emissions scandal are serious on the manufacturer and far beyond.

At the time of going to press the former VW CEO, Martin Winterkorn, is under criminal investigation by German authorities and it is certain that a number below him will follow as Volkswagen tries to cope with revelations that other parts of the Group – Audi, Seat and Skoda – are also involved.

The 11 million diesel fuelled VW vehicles that are currently known to be affected by the emissions cheat device software brand-by-brand ar

          VW – 5m.

          Audi – 2.1m.

 Skoda – 1.2m.

 Seat – 700,000.

 Vans – 1.8m.

“Those people who allowed this to happen, or who made the decision to install this software – they acted criminally and they must take personal responsibility,” said Olaf Lies, a Volkswagen board member and economy minister of Lower Saxony, talking to the BBC. “We only found out about the problems in the last board meeting, shortly before the media did.”

Already HMRC and the insurance industry are muttering about the possible impact on tax and policies that will have many flinching.

The practical implications for fleet operators in the UK offering Volkswagen diesel fuelled vehicles could also be enormous.

 

Fleet operator shock

Sewells Research and Insight has stated that the immediate impact ‘DieselGate’ is having on UK fleet decision makers is a recognition that US investigations are only the beginning of a huge investigation. It found that 95% of fleet decision makers believe the US investigation will extend to the UK and 81% expect implications for the UK fleet market.

More than 300 fleet decision makers in the UK took part in the survey and 68% of them believe cars in the UK will be affected and a large number (61%) will expect reimbursement for any resulting recalls in the UK.

Responsible for 2.3 million car registrations in the UK, fleets are among the most powerful and important buyers in the UK car market. Of the 2.3 million company cars in the UK, 81% currently run on diesel.

Fleet decision makers place great importance on emissions figures with 90% considering CO2 emissions important and 64% considering NOx emissions important when adding new cars to choice lists. Furthermore, 84% look to manufacturers to cut NOx emissions in their diesel cars.

More than half (54%) of respondents said they are less likely to trust claims made by manufacturers in future. The impact on the VW Group was even more fundamental with 62% stating they are less likely to trust the manufacturer’s claims.

Of those currently operating VW Group models on their fleet, 49% claim they are potentially looking to review VW Group’s position on their fleet’s choice lists. Three in every four (73%) are looking for reassurance from the VW Group that vehicles on fleet are not affected. Two thirds of all respondents (67%) are now looking to all manufacturers that respective models on their fleet are not affected.

“Fleet operators have a right to ask serious questions of manufacturers when news like this emerges,” said Simon Staplehurst, Head of Commercial Insight, Sewells Research. “Fleet managers make critical business purchasing decisions on manufacturer claims when it comes to fleets and trust is the bedrock of these relationships and choices.”

As our graph shows, other car manufacturers are being sucked into the DieselGate mire.

Picture:    A car crash for all – the share price for non-VW manufacturers has taken a hit too.

Article written by Mike Gannon

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