Updated: December 25, 2015 11:12:27 pm
I don’t mention sales of any entity from the automotive circus in most of my reports, but this one is important — Toyota has reclaimed the top position in global sales from Volkswagen. Toyota sold 7.5 million units in the first three quarters of 2015 against 7.43 million units that VW shifted from its factories in the same calendar space. Interestingly, however, numbers of both the companies fell compared to the year-to-date sale from last year. You don’t need a management degree to hypothesise a further fall in VW’s numbers — the diesel scandal will play its part in being the reason for it. Why is it important that I’m writing about a company’s sales figure that’s already stale news? Because I’m not. I’m writing about something much more centric to the Indian consumers.
While the US and Europe erupted in anger over the diesel scandal (read this for a backgrounder), there wasn’t even so much as a noticeable whisper, in comparison, in India. Some reports in the media suggested, based on initial reactions by Automotive Research Association of India (ARAI) executives, that Volkswagen India might not be found culpable as the emission norms in India are lower than that in the US, and the country is still struggling to implement Bharat Stage IV (equivalent to Euro 4) across its landmass. I believe the stand of the authorities will change over the next couple of weeks.
Volkswagen’s Indian business unit is expected to issue a recall which might affect over 100,000 vehicles across the company’s product portfolio, revealed a highly placed industry expert on the condition of anonymity. In India, the under-investigation EA 189 (1.2-litre, 1.5-litre, 1.6-litre, and 2.0-litre) TDI engine which had the defeat device software installed, is in application across the Volkswagen and Skoda range of cars in India, and even a number of Audi models. There wasn’t, however, any word of confirmation from Volkswagen or Skoda on the matter.
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In the UK alone, close to 1.2 million vehicles are expected to be affected and VW is planning a three-stage recall to cover and fix these vehicles by the end of 2016. The 1.2-litre and 2.0-litre diesel engines will require a software fix, while the 1.6-litre diesel will need new injectors, in addition to the software fix, acknowledged Paul Willis, managing director, Volkswagen Group, UK, recently. The affected cars in the US, however, might need a change of catalytic converters and/or Selective Catalytic Reduction (SCR) AdBlue urea injection system. AdBlue is used in SCR to reduce NOX levels in diesel exhaust emissions. Michael Horn, president and CEO of Volkswagen Group of America, has reportedly admitted that any fix is likely to affect the performance of the cars.
Recent reports in Germany suggested that the EA 288 engine — a derivative of the EA 189 engine at the nucleus of the scandal — could also have the cheat software, but VW denied the claims clarifying that the Euro 5 and Euro 6 EA 288 engines were not built with the defeat device found in the EA 189 engine.
According to an estimate by Credit Suisse — which accounted for the cost of fixing the cars, settling the civil and criminal claims, and reimbursing the customers — the diesel scandal will cost Volkswagen almost $90 billion.
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