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The VW emissions carnage assessment with an upside

Bombs cause destruction. Even if they're intelligently guided and pinpoint, there's always collateral damage. The strange Volkswagen brew, which is still spontaneously combusting in plain sight, will result in aftershocks for years. And the professional end of the corporation's top leadership will not be the only casualties. Blows are striking shareholder confidence, the residual value of the cars involved, consumer confidence, and the German economy itself. A hard rain's going to fall elsewhere, too. Here are just four damage assessment areas. The High-Compression Past and Low-Compassion Future of Diesels Despite European and especially German manufacturers' high belief that diesel engines were a way to light-duty automotive salvation, VW's scandal started the last nail in the fuel's coffin. Regulations both in the U.S. and in Europe for particulates and nitrogen oxide (NOx) are getting much harder to meet, and this is at the very core of VW's deception. Even with the high-cost exhaust after-treatment systems, sky-high fuel pressure, and sophisticated electronics, the inescapable NOx realities won't be washable by technology in an affordable way. German engineering pride will have to work a real miracle to meet these looming regs and the stain of VW's scandal did the whole diesel movement no favors. Perhaps not so ironically, the E.U. adopted more stringent emission standards this year, which closely mimic the U.S. Tier 2, Bin 5 figures phased in for 2008. Indeed, when VW announced it was able to meet the stringent US NOx emissions standards in 2009 for its diesel engines without urea injection as an exhaust after-treatment, it was a particularly high point of engineering pride for the company. No other manufacturer had figured out how to do so. One Honda official at the time remarked that they had simply no idea how VW was achieving this feat and Honda couldn't come close. Well, neither could VW. On a macro scale, European cities are also starting to face government fines for air quality violations. This is forcing those cities to find various ways to cut smog-related causes like tailpipe emissions. In fact, Paris has gone to the length of restricting car use on a sliding scale when smog persists, while electric cars are free to roam. France's longer and larger plan is banning diesel fuel for light-duty transportation entirely. But why was there a frothy focus by the European manufacturers on diesels in the first place?

Volkswagen's emissions deception brings more scrutiny to entire industry

Volkswagen's emissions deceptions have hurt the entire auto industry's credibility with federal regulators. Days after the world's largest automaker confessed to installing software that circumvents emissions standards on approximately a half-million diesel vehicles in the United States, a top federal safety official says the company's dishonesty will force government officials to view the entire auto industry with heightened skepticism. "Your first question has to be, 'How extensive is it through the whole industry?' You don't know if it's a unique case or if other people are doing it," said Mark Rosekind, administrator of the National Highway Traffic Safety Administration. "The unfortunate part is you're not going to worry about one person. It's extended to the entire industry. If they did it, someone else could do it." "They tell you one thing, you question it." - Mark Rosekind Rosekind's agency doesn't bear responsibility in investigating the emissions cheating. That falls to the Environmental Protection Agency, which served Volkswagen with a Notice of Violation on Friday that alleged the company's diesel vehicle equipped with 2.0-liter engines contained a defeat device that allowed the cars to detect when emissions testing was taking place. In normal driving situations, the cars spewed pollution at as much as 40 times allowable thresholds. But because of the emissions cheating, NHTSA wonders if the German automaker has been cutting corners on safety standards or disingenuous on safety-related discussions. Speaking at an auto-industry event in Novi, MI, on Tuesday, Rosekind indicated no information can now be taken at face value. He used the phrase "Question assumptions" several times in discussing the case. "Of course, question assumptions means, 'Is there some other safety element there that we're now going to have to investigate?" he said. As it did in the General Motors ignition-switch probe, the Department of Justice has initiated an investigation of Volkswagen and the House Committee on Energy and Commerce announced it will hold hearings on the cheating. For NHTSA, criminal cases complicate matters. The agency core function is to regulate safety, not conduct criminal investigations. But in the early going, their investigators may be the first ones to spot wrongdoing.

Volkswagen building budget car family planned for China in 2018

Volkswagen has publicly pondered a low-cost car for China, something akin to Nissan's Datsun revival in Southeast Asia, for at least three years. In 2013 it tapped Chinese partner FAW to help develop an entire budget brand, with plans to have something on the market in 2016 in the 6,000- to 8,000-euro range. About a year ago, VW said it couldn't figure out how to engineer an inexpensive car that didn't run counter to the brand's values, then three weeks later said it had overcome the issues. Reuters now reports that VW CEO Martin Winterkorn told German newspaper Bild am Sonntag, "We will bring a budget-car family to market in 2018, with an SUV, saloon and hatchback." Winterkorn didn't offer any other details like who VW would work with to build it - VW has partnerships with both FAW and SAIC, but the announcement will be welcomed by the brand's Chinese outpost. When this adventure started, VW said it was working to create a model that would cost 6,000 to 8,000 euro. That estimate has increased. Winterkorn is now saying the 2018 offerings will come in between 8,000 and 11,000 euro. In a straight euro-to-yuan conversion, that would equate to Chinese pricing of 56,000 to 77,000 yuan. For comparison, the New Polo with a 1.4-liter engine and a manual transmission starts at 85,900 yuan. Perhaps with an eye on the success of the Nissan-Renault sub-brand Dacia in Europe and emerging markets, Winterkorn told Bild, "We will see if this is something of interest for other markets as well." On the opposite end of the price/performance spectrum, Winterkorn also said that VW is working on two new models for Bugatti, one powered by a traditional gasoline engine and another with some sort of hybrid setup. The latter model would reportedly be the higher-performing of the two, though it's not clear whether there would be two vehicle lines or two versions of the same vehicle. As ever, as soon as we know more, so will you.