Volkswagen Emissions UpdateNovember 8, 2015
In case you’ve missed the latest developments in the Volkswagen emissions saga, including irregularities in CO2 levels as well as NOx levels, here’s a summary.
On 3 November 2015, the Volkswagen Group announced that during the course of internal investigations, irregularities were found when determining type approval CO2 levels. Based on present knowledge around 800,000 vehicles from Volkswagen Group could be affected. An initial estimate puts the economic risks at approximately 2 billion euros.
The Board of Management of Volkswagen AG will immediately start a dialog with the responsible type approval agencies regarding the consequences of these findings. This should lead to a reliable assessment of the legal, and the subsequent economic consequences of this not yet fully explained issue.
Under the ongoing review of all processes and workflows in connection with diesel engines it was established that the CO2 levels and thus the fuel consumption figures for some models were set too low during the CO2 certification process. The majority of the vehicles concerned have diesel engines.
Prior to this, Matthias Müller, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, announced the five key steps to realign the Group following the Volkswagen emissions ‘scandal’.
He presented a five point plan that he intends to use so that Volkswagen remains one of the world’s leading automobile manufacturers in the future. Müller is confident that “Volkswagen will emerge from the current situation stronger than before”. He announced that the cornerstones of the Group’s Strategy 2025 will be presented next year.
The CEO explained that his top priority is to support the customers affected by the Volkswagen emissions issue. “Our customers are at the core of everything that our 600,000 employees worldwide do,” he said. According to Müller, Volkswagen is working intensively to develop effective technical solutions. In contact with the Kraftfahrtbundesamt (KBA – German Federal Motor Transport Authority) the implementation is set to begin in January 2016.
Müller’s second priority is to systematically drive forward and complete the investigation into what happened. “We must uncover the truth and learn from it”, he said, adding that Volkswagen is being extremely thorough in its analysis. For this purpose, audit firm Deloitte has been engaged in addition to the steps already announced. According to Müller, those responsible for what has happened must face severe consequences.
Müller’s third priority is to introduce new structures in the Volkswagen Group. “The key point is that Group management will be decentralised to a greater extent in the future,” he said, with more independence for the brands and regions. Müller stated that the Board of Management will focus on addressing cross-brand strategies, leveraging synergies and ensuring that Group resources are used effectively. “We will review in detail our current portfolio of more than 300 models and examine the contribution that each one makes to our earnings.”
As his fourth priority, Müller is driving forward a realignment of the Group’s culture and management behavior. He noted that the pursuit of perfection, the employees’ commitment and social responsibility in the Volkswagen Group must be retained. However, he believes that changes are necessary in how Volkswagen communicates and how it handles its mistakes. “We need a culture of openness and cooperation.” Müller also called on everybody at Volkswagen to display more courage, greater creativity and a more entrepreneurial spirit in their dealings with one another.
The Volkswagen CEO announced that the fifth priority will be to transform the Group’s Strategy 2018 into a Strategy 2025. “Many people outside of Volkswagen, but also some of us, did not understand that our Strategy 2018 is about much more than production numbers. A lot of things were subordinated to the desire to be “Faster, Higher, Larger”, especially return on sales.” According to Müller, the point is not to sell 100,000 more or fewer vehicles than a major competitor. Instead, the real issue is qualitative growth. Müller announced that the cornerstones of the Group’s Strategy 2025 will be developed over the coming months, and that it would be unveiled mid-way through next year.
Previously, Volkswagen confirmed that no software constituting an improper defeat device as defined in law is installed in vehicles with EA288 EU5 as well as EU6-engines in the European Union. Consequently, new vehicles of the Volkswagen Group offered within the European Union with those engines comply with legal requirements and environmental standards.