2006 Volkswagen Jetta Tdi Sedan 4-door 1.9l on 2040-cars

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VW budget sub-brand stuck in limbo over VW standards, costs

Reports in October 2012 claimed Volkswagen had begun investigating the creation of its own budget brand. This came after having failed to purchase Malaysian car company Proton or produce a meaningful partnership with Suzuki, and after watching Renault-Nissan make piles of euro on Dacia and plot the return of Datsun. For VW, more important than the question of what to call it was how to build it profitably and in a way that didn't damage the VW brand. According to a report in Autocar, a satisfactory answer still hasn't been found. The hurdle is how to hit "'necessary' quality and safety levels" at the price points needed to make the venture worthwhile. At the time of the 2012 report, German outlet Der Spiegel said VW was trying to get prices down to 6,000 to 8,000 euro ($7,784 to $10,379 US), about two thousand to four thousand euro under the price of the VW Up and in line with the cost of a 6,790-euro Dacia Sandero in Germany. In March 2013, VW announced, "We want to bring a true budget car to the market in China in the foreseeable future," the most concrete move in that direction after years of planning to make a decision. Working with local Chinese maker FAW, it was predicted that the vehicle in question would appear around 2016, but as of November last year a final vote on it needed to wait until this year because "We are still working on the cost side" and profit possibilities for a car that "has to be durable, it has to be precise, it has to be safe." Even Fiat, another automaker long considering a budget brand beneath its Fiat line-up, wasn't sure how to squeeze any extra money from lower-cost products but was sure that it couldn't be done by manufacturing in Europe. If VW hasn't yet made the math work with a joint venture in China, it will be interesting to see how it might build a European go-it-alone business case.

Feds allege widespread Volkswagen cheating on clean-air rules

Volkswagen intentionally installed software in nearly a half-million diesel vehicles that helped the cars evade substandard results on emissions tests, the federal government charged Friday. The Environmental Protection Agency issued a notice of violation to the German automaker, saying the company's software broke the law by violating two provisions in the Clean Air Act. Circumventing the standards meant affected cars emitted as much as 40 times the allowable level of certain pollutants. Both the EPA and California Air Resources Board have launched investigations. In its notice of violations, the EPA said Volkswagen officials admitted to installing and concealing what they call a "defeat device," which was designed to detect when the cars were undergoing official emissions tests – and only turn on emissions controls during that time. "Our goal now is to ensure that the affected cars are brought into compliance, to dig more deeply into the extent and implications of Volkswagen's efforts to cheat on clean air rules, and to take appropriate further action," said Richard Corey, executive officer of CARB. The allegations cover approximately 482,000 vehicles sold in the United States over the past seven years. Cars involved include diesel versions of the Jetta, Beetle, Audi A3 and Golf manufactured between the 2009 and 2015 model years. Passats manufactured for the 2014 and 2015 model years are also included. Federal officials note there is no safety danger to motorists, but the cars will be recalled for repairs. If true, Volkswagen faces a fine that could run in the hundreds of millions of dollars -- likely higher than the $300 million charge the EPA levied last November at Hyundai and Kia for exaggerating the fuel-economy in several models. The charges also put a tremendous dent into the company's plans to increase sales of its "Clean Diesel" vehicles in North America. In a written statement, Volkswagen Group of America acknowledged it had received the notices from the EPA and CARB. "VW is cooperating with the investigation; we are unable to comment further at this time," it said. Federal officials said the defeat-device software was uncovered during an independent analysis by researchers at West Virginia University, who in working with the International Council on Clean Transportation, a non-governmental organization, raised questions about emissions levels.

Porsche again staring down another $1.8B in hedge fund lawsuits

The sequence of events from 2007 that began with Porsche's secret attempt to take over Volkswagen, and instead lead to Porsche being taken over by VW, continues to instigate lawsuits against the Stuttgart sports car manufacturer. A group of hedge funds that suffered over $1 billion in losses sued the car company in New York. Porsche had publicly stated it wasn't trying to buy VW, the hedge funds in question were shorting VW stock, and when Porsche's actual intentions were revealed, the stock shot up and the hedge funds took a beating.
The case was thrown out over the issue of jurisdiction, then appealed, only to see another suit filed on top of that. After that, most of the hedge funds withdrew their claims in New York and Porsche offered a 90-day window to refile in Germany where it is already fighting a number of other suits over the same issue. The hedge funds accepted the offer, refiling in Stuttgart for $1.8 billion in damages. According to Bloomberg, Porsche hasn't commented on the refiling, but as the same plaintiffs are involved, it's safe to assume that the carmaker still feels the case is "unsubstantiated and without merit." It has fared alright so far even in German courts, with two lesser cases against it thrown out last year.