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VW announces recall of 26,000 2014 models with 1.8T engines

Volkswagen has followed up on a stop-sale order from earlier this month, announcing a voluntarily recall of 26,400 vehicles that are powered by the brand's 1.8-liter, turbocharged four-cylinder engine. The new mill replaced the despised 2.5-liter five-cylinder in the Jetta, Passat, Beetle and Beetle Convertible last year. Weirdly, though, of the 26,452 units covered in the recall, only 1,655 are customer vehicles.
According to VW, the affected models were built between February 1 and April 6 of this year, and feature bad O-ring seals in the transmission oil cooler. Apparently, the faulty O-rings could cause a fluid leak, as they won't seal between the oil cooler and transmission. VW is blaming a material change from a supplier for the problem.
There have been no fires, injuries, accidents or fatalities relating to this issue, which VW will be fixing free of charge. Customers will need to report to dealers to have the O-rings replaced.

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.

VW chair says component cost decrease keeps him confident of EV success

Volkswagen AG is in the middle of implementing a comprehensive electric vehicle strategy, one that we've been documenting for a long time. The Group stands ready to offer dozens of plug-in vehicles in the coming years if it feels there is sufficient demand and believes that selling a million EVs in Germany by 2020 is reasonable. That would be a solid number, but remember that VW sold over 5,923,000 passenger cars around the world last year, and the group as a whole sold over 9.7 million. At the company's annual Media Conference and Investor Conference in Berlin recently, the chairman of the board of VW AG - surrounded by some decidedly non-green examples of the VW Group's vehicles (some absurd new Bugatti, for example) - took some time to put the company's EV plans into focus. The upshot is that Dr. Martin Winterkorn is still guiding his electromobility ship into new waters, saying that "many more [plug-in] models will follow." Winterkorn said there are three main reasons he is confident in the ability of VW (and Audi and Porsche, at the very least) to push EV sales upward. Batteries are getting better, he said, and if the ranges can be extended, then customers are happy. But the real secret lies in reducing component costs. He said (as translated): It is important to look at the cost of the components: the battery technology, the electric motor and the electric components. Whenever you go into volume production, you of course have economies of scale. In two to three years' time, if we are able to achieve the goals we are setting for ourselves with cost and reach sufficient volume, I do believe that we can achieve two to three percent [market share] within VW Group. So, hitting a million EVs by 2020 is reachable. With the e-Golf and the e-Up off to excellent sales starts, we're willing to be confident as well.