Volkswagen’s emission admission

Last week VW shares plunged 30 percent when the car manufacturer was smoked out for cheating safe emissions guidelines. 

VW was accused amongst others including Audi of fitting devices to cars, which gave false readings, to benefit owners when cars were being tested.  This reduced the potential tax outlay because the car was deemed to fall within safety standards set by national environment agencies, therefore attracting owners to buy the car in the first place. It also allowed car manufacturers to obtain tax credits to produce emission-efficient vehicles.

In 2007 Volkswagen were warned that its emission efficiency software should only be used in company tests and not for normal driving.  It is estimated that 11 million VWs are affected worldwide.  

VW faces up to 18billion Euros in fines.  It is the number 1 global car-maker in terms of sales and it has been forced to set aside 7 billion Euros to cope with the immediate fallout.

Actions taken by different Countries:

Germany:  The Transport Ministry sends a fact finding committee to VW to establish the facts before seeking to take next steps    Merkel describes it as a matter in the public and wider international interest which must be addressed factually and forensically.

United Kingdom: The UK regulator, the Vehicle Certification Agency, seeks to rerun lab tests to compare against real world driving emissions before taking further steps.

United States: The Environmental Protection Agency reveals that there are significant breaches.  Following its report, the Justice Department and New York regulators launch criminal investigations for fraud.

France: Decides to check 100 diesel cars, according to the Environment Minister to determine any element of fraud.

Italy: Decides to carry out checks on 1000 diesel cars at random after a call by the Transport Minister to intervene.

Canada: Seeks to investigate 200,000 VW and Audis after a call by the Environment Agency to take swift measures.

Switzerland: Sets up a task force and in the interim bans the sale of Audis and VWs.

South Korea: Environment Ministry to investigate 4-5000 Jetta, Golf and Audi A3s which could extend to all German diesel cars if results are found to show fraudulent activity.

Are there more of these manufacturers in the pipeline, or has the list been exhausted?

Do you want to read more content like this? ALFIES offers a stream of exclusive content from industry leaders across the Accounting, Legal, Finance and Insurance sectors. Request your membership here.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s