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CAR TECH
VW draws up refit plan for cars in pollution scam
By Simon MORGAN
Frankfurt (AFP) Sept 29, 2015


Japan orders diesel car emissions probe after VW scandal
Tokyo (AFP) Sept 29, 2015 - Tokyo on Tuesday ordered some of the country's biggest automakers to report on whether their diesel vehicles meet Japanese standards, in the wake of a scandal that saw Volkswagen admit it rigged vehicle software to dupe emissions tests.

Japan's transport ministry told four automakers that sell diesel vehicles at home -- Toyota, Nissan, Mazda and Mitsubishi -- along with importers of European brands to report by Friday on whether their vehicles are fitted with the software that can fool pollution tests.

Officials would then determine whether or not to beef up their current diesel car inspection process and change testing, Transport Minister Akihiro Ohta said.

"We are collecting information to understand what happened in its entirety," a transport ministry official told AFP.

"By studying our inspection system, we're going to see if the current regime is sufficient."

Japan's order follows similar moves in other countries including South Korea, Britain and France.

The global auto industry has been shocked by the Volkswagen scandal, in which one of the world's biggest automakers was shown to have programmed its four-cylinder diesel cars to perform well in official anti-pollution testing, but then override the pollution controls for better road performance when out in the real world.

Volkswagen revealed that 11 million of its diesel vehicles worldwide are equipped with so-called defeat devices.

German prosecutors have launched a criminal probe against Volkswagen's former boss Martin Winterkorn, who resigned last week.

US authorities banned sales of Volkswagen diesel cars until 2016, while Switzerland suspends sales of new Volkswagen models.

The German company is facing a potential $18 billion in US fines.

The scandal prompted the EU to urge its 28 member states to investigate whether vehicles comply with European pollution rules.

The global scandal has not directly affected Japan because the German manufacturer did not export the affected vehicles to the Asian nation.

But some 230 affected Volkswagen vehicles are known to have been imported by individuals to Japan.

In Japan, diesel engines are often used in large vehicles, such as trucks and farm equipment, but rarely in cars.

Volkswagen on Tuesday revealed a plan to refit millions of vehicles affected by a worldwide pollution-cheating scam, as its new chief vowed to act ruthlessly to overcome the "severest test" in the car giant's history.

The German government has given VW until October 7 to explain how it will resolve the scandal, which has rocked the industry and wiped 29 billion euros ($33 billion), or 38 percent, off VW's market value in 10 days.

Chief executive Matthias Mueller, who took over the Volkswagen steering wheel on Friday, told senior management that technical solutions would be submitted in October.

Once approved by the German authorities, Volkswagen will inform customers and arrange for the cars to be refitted, he told managers late Monday, according to remarks released by the firm.

The carmaker later Tuesday released a statement saying owners of the affected cars would be notified "in the next weeks and months", adding that "all the brands concerned are going to create Internet pages where clients will be able to follow developments".

Volkswagen, the world's biggest carmaker by sales, has admitted that up to 11 million diesel cars worldwide are fitted with devices that can switch on pollution controls when they detect the car is undergoing testing.

They then switch off the controls when the car is on the road, allowing it to spew out harmful levels of emissions.

CEO Mueller insisted that the software was not activated in all 11 million vehicles, however, and the number of vehicles actually needing a refit would be fewer than that.

Nevertheless, with the embattled auto maker facing incalculable costs and a potential tidal wave of litigation, CEO Mueller described the crisis as "the severest test in (VW's) history."

"There is no justification for deception and manipulation," the 62-year-old manager said.

"The inconceivable misconduct that has come to light in Volkswagen over the past days pains me and angers me immensely."

VW's upmarket subsidiary Audi and its Czech arm Skoda have admitted that more than three million of their vehicles were fitted with the suspect devices. Spanish unit Seat has said 700,000 of its cars were also equipped with the technology.

A spokesman for VW's trucks division said that 1.8 million light commercial vehicles were involved.

- 'Ruthless' response needed -

The carmaker, which in the first six months of this year overtook Toyota to become the world leader in terms of sales, needed to win back the trust it has lost, Mueller said.

A YouGov opinion poll revealed that VW's image among German consumers has taken a severe hit and is now no better than Daimler's city runaround, the Smart.

The affair "needs to be cleared up ruthlessly. We need courage and fighting spirit. It will be difficult and... there will be setbacks. But we can and will do it," Mueller said.

"Together, we can overcome this crisis and make Volkswagen an even better company."

On Monday, German prosecutors said they were looking to establish the exact chain of responsibility in the scam, opening an inquiry against the former CEO Martin Winterkorn, who insisted that he had not been personally aware of any wrongdoing on his part.

In addition to Germany, national authorities in several other countries have announced probes. Japan on Tuesday joined a long list of countries in ordering some of the country's biggest automakers to report on whether their diesel vehicles meet Japanese standards.

And the European Commission on Tuesday called Herbert Diess, head of the Volkswagen brand, to Brussels for talks to assure that the group "cooperates fully with national authorities and respects European regulations".

Lawsuits are also being filed, including class-action litigation in the United States.

VW has already said it will set aside 6.5 billion euros in provisions in the third quarter. But analysts suggest one to three billion euros more could be needed.

On top of that, VW also faces onerous regulatory fines, including up to $18 billion in the United States, and the fallout on customer purchases cannot yet be estimated.

- Collateral victims -

Germany's economy minister, Sigmar Gabriel, has promised to support the Volkswagen group's 600,000 employees who he said do not deserve "to pay for the faults of their managers".

And the German automobile federation VDA has weighed in against calls to reject diesel cars altogether, denouncing what it said was an "anti-diesel lobby" acting in a "completely unjustified" way.

The repercussions of the scandal can be clearly seen in VW's hometown of Wolfsburg, in northern Germany, which has imposed an immediate freeze on spending and hiring in the public administration in case its finances are adversely affected.

The business tax VW has to pay, calculated on the basis of its annual turnover, is a significant source of revenue for the town's coffers.

Located 200 kilometres (120 miles) west of Berlin, Wolfsburg was founded in 1938 with the construction of the first factory to build the carmaker's iconic Beetle model.

More than half of the town's population of around 124,000 work for VW, which finances a long list of local sporting and cultural activities, including the premiere league football club VfL Wolfsburg.

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Volkswagen

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