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Audi CEO's Dieselgate arrest threatens fragile truce among VW stakeholders

FRANKFURT — The arrest and detention of Audi's chief executive forces Volkswagen Group's competing stakeholders to renegotiate the delicate balance of power that has helped keep Audi CEO Rupert Stadler in office. Volkswagen's directors are discussing how to run Audi, its most profitable division, following the arrest of the brand's long-time boss on Monday as part of Germany's investigations into the carmaker's emissions cheating scandal. The supervisory board of Audi, meanwhile, has suspended Stadler and appointed Dutchman Bram Schot as an interim replacement, a source familiar with the matter said on Tuesday. Schot joined the Volkswagen Group in 2011 after having worked as president and CEO of Mercedes-Benz Italia. He has been Audi's board member for sales and marketing since last September. The discussions risk reigniting tensions among VW's controlling Piech and Porsche families, its powerful labor representatives and its home region of Lower Saxony. VW has insisted the development of illegal software, also known as "defeat devices," installed in millions of cars was the work of low-level employees, and that no management board members were involved. U.S. prosecutors have challenged this by indicting VW's former chief executive Martin Winterkorn. Stadler's arrest raises further questions. Audi and VW said on Monday that Stadler was presumed innocent unless proved otherwise. Munich prosecutors detained Stadler to prevent him from obstructing a probe into Audi's emissions cheating, they said on Monday. Stadler is being investigated for suspected fraud and false advertising. Here are the main factors deciding the fate of Audi. Background: Audi's role in Dieselgate Volkswagen Group was plunged into crisis in 2015 after U.S. regulators found Europe's biggest carmaker had equipped cars with software to cheat emissions tests on diesel engines. The technique of using software to detect a pollution test procedure, and to increase the effectiveness of emissions filters to mask pollution levels only during tests, was first developed at Audi. "In designing the defeat device, VW engineers borrowed the original concept of the dual-mode, emissions cycle-beating software from Audi," VW said in its plea agreement with U.S. authorities in January 2017, in which the company agreed to pay a $4.3 billion fine to reach a settlement with U.S. regulators.

VW orders external probe into diesel emission scandal

There are well over 480,000 Volkswagen-made, diesel-powered vehicles currently traveling roads in the United States that do not meet the Environmental Protection Agency's emissions requirements. This, as you can probably imagine, is a very big deal, and has led VW CEO Professor Doctor Martin Winterkorn to release an official statement on the matter. "I personally am deeply sorry that we have broken the trust of our customers and the public," he said. It's important to note that these vehicles run software with a so-called "defeat device" that kicks in when the on-board computer senses that it is being tested for emissions. When the car is operating normally – in other words, when its exhaust isn't being sniffed – the cars do not meet US emissions standards. According to the EPA and the California Air Resources Board, affected cars emit as much as 40 times the allowable level of certain pollutants. "We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case," according to Winterkorn, who added, "Volkswagen has ordered an external investigation of this matter." It's not yet known who will carry out this investigation. At present, there are still a number of 2015 Volkswagen models on dealer lots that do not meet emissions requirements. VW has issued a stop sale on vehicles equipped with the 2.0-liter TDI diesel engine. What's more, the German automaker has been barred from selling 2016 model-year vehicles that use this engine, according to The Detroit News. Last year, diesel vehicles made up about 22 percent of all VW sales, which means these restrictions will have a big impact on the brand's sales performance until a remedy is found and the vehicles are approved for sale. Interestingly, the EPA has started a campaign of sorts to test vehicles from other automakers that sell diesel-powered vehicles in the United States to make sure they comply with emissions requirements under all operating circumstances. The EPA says it "will be reviewing [its] compliance protocols and introducing ways in which [it] can effectively test not only for emissions performance but also for the potential presence of defeat devices," according to a statement provided to The Detroit News. Check out the full statement from VW CEO Martin Winterkorn below. Related Video: STATEMENT OF PROF. DR.

Audi prices 2014 A8L TDI from $82,500*

During the Los Angeles Auto Show last November, Audi told us that it would be bringing four new diesel-powered models to the United States this year. The first to arrive is the 2014 A8L TDI you see here, and we've now learned that the big oil-sipper will be priced from $82,500, (*excluding $895 for destination).
The whole new range of diesel models will be powered by Audi's 3.0-liter TDI V6, good for 240 horsepower and 406 pound-feet of torque in this application. Of course, Quattro all-wheel drive is standard, and even in the big A8, the diesel grunt will be enough to propel the long-wheelbase flagship to 60 miles per hour in 6.4 seconds (almost a full second slower than the A8 3.0T we reviewed last fall). That said, the A8 TDI should still be a pretty engaging steer, and considering the fact that this thing will reportedly return fuel economy figures of up to 36 miles per gallon on the highway (24 in the city), a slightly slower launch time is well worth it. (The A8 3.0T tops out at 28 mpg highway.)
Elsewhere in the segment, Mercedes-Benz offers a diesel version of its S-Class flagship, retailing for $93,000 and good for fuel economy figures of 21/31 mpg city/highway. By comparison, the A8 TDI seems like a steal, and we'll be interested to see where the forthcoming BMW 7 Series diesel falls into the class of huge oil-burning barges.