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Weekly Recap: Diesel scandal continues to fuel VW's woes

Volkswagen's woes continued this week when it was delisted from the Dow Jones Sustainability Index and stripped of awards. Senators are also lining up to advocate for criminal and civil action against the automaker, and its consumer reputation is in tatters. Put simply, it's been another rough period for VW. Despite this, the company eked out a sales gain of less than one percent in September, though that was well behind the overall market's performance. Sister brand Audi, which sells a diesel A3, was less affected, posting a 16-percent gain in September. Revelations that Volkswagen rigged millions of diesel-powered cars around the world didn't surface until September 18, so the full sales impact of the ongoing scandal won't likely be felt until October. Meanwhile, VW's image continues to take a beating, and an AutoPacific survey found only one in 14 vehicle owners have a positive opinion of the company. Before the scandal broke, three-quarters of respondents had a positive view of VW. The survey also found 64 percent don't trust Volkswagen, though the same number believe other companies are or may also be using cheating devices to pass emissions tests. "The reputation of diesels has been severely damaged, at least for the short term," Ed Kim, AutoPacific's vice president of industry analysis, said in a statement. Despite the lingering malaise, experts believe VW will recover, just as Toyota and General Motors eventually emerged from their own high-profile controversies. "Consumers have proven through numerous recalls that they are resilient and quickly return to their buying habits," Kim said. OTHER NEWS & NOTES Mazda to reveal sports car concept in Tokyo Mazda will bring a curvy sports car concept to the Tokyo Motor Show in October. The automaker is being especially coy with the details, only releasing the dark teaser shot that you see to the right and a cryptic statement that suggests the concept "condense[s] Mazda's entire history of sports-car development into a single model." Immediately, speculation abounded this is an RX-7 and RX-8 successor, though Mazda didn't specify what engine the concept will have. Reportedly, the company is still working on rotary engines. Mazda will have a Cosmo Sport 110S on its stand in Tokyo, which pioneered rotary technology in 1967. Read into that what you will. The Rock pitches Ford service Dwayne Johnson, also known as The Rock, is the new frontman for Ford service.

Volkswagen rules out more potent Polo R

Volkswagen may be planning ever more powerful versions of its Golf, but don't expect that lust for power to trickle down to the smaller Polo anytime soon as the German automaker has reportedly ruled out the prospect of making a Polo R. This according to Autovisie, the automotive section of Dutch newspaper De Telegraaf, in speaking to VW representatives at the launch of the new Polo GTI. Where the previous Polo GTI offered 177 horsepower, the new one packs 189 and is available with either a six-speed manual or seven-speed dual-clutch transmission. The company briefly offered a Polo WRC Street with 220 horsepower, but that was only for a limited edition that Autovisie says will not be repeated for mainstream production. Which may just be for the best, as far as we're concerned, as no versions of the Polo are offered in the US, and we don't need yet another piece of forbidden fruit we can't get our hands on. The decision may seem at odds with the Polo R WRC rally machine with which Volkswagen has been dominating the World Rally Championship for the past two seasons, but was likely made in order to keep the Polo from infringing on Golf territory. VW currently offers the Golf GTI with 210 horsepower and the Golf R with 292, and showcased an even more powerful version with nearly 400 hp.

Audi rumored to buy Alfa Romeo, officials deny it

For more than two years, Volkswagen has been making public statements about its willingness to buy Alfa Romeo and quadruple the Italian brand's sales, and for just as long, Fiat CEO Sergio Marchionne has replied with some version of "Mr. Piëch, drop it." According to a report in Ward's Auto, all that jousting might be over: it claims that sources close to both Marchionne and Audi CEO Rupert Stadler admit that the two are in talks for Audi to buy not just Alfa Romeo, but a production plant in Italy. In fact, a final deal could possibly include partsmaker Magnetti Marelli.
Against that backdrop, a report by German news weekly Stern quotes a Fiat spokesmen as saying it doesn't comment on rumors and an Audi rep has said flatly that "There is no substance in the news." If a sale is being arranged, the timing would seem to point to how eager Fiat is to raise cash to complete its major initiatives. Even though Alfa Romeo continues to delay its return to the US, it just showed off the production version of the 4C at the Geneva Motor Show (shown above) and said that preferred Fiat dealerships here would get them. Then there's Alfa's recently concluded deal with Mazda to develop a roadster based on the next generation MX-5 Miata - a deal that would seem to help both the Italian and Japanese brands.
The monetary issues are troublesome, though. Fiat is taking a beating in the European market and its weak-kneed balance sheet is delaying gotta-have-it products like the Jeep Cherokee. Fiat has been talking to banks about getting money to buy the rest of Chrysler and those financial institutions have also raised issues about debt and cash reserves, and the nasty game of chess Fiat is playing with the United Auto Workers (and now the court system about the portion of Chrysler it doesn't own) could end up blowing another hole in Marchionne's plans. It is possible that this could finally have convinced Fiat to at least see how serious Audi's parent company, Volkswagen, is about buying Alfa Romeo. Or it could be just another rumor.