Volkswagen’s ‘dieselgate’ scandal

Software used in Volkswagen, Porsche, Audi brands, helps to make cars compliant with pollution standards

FRANKFURT: Volkswagen’s “dieselgate” emissions cheating scandal, revealed in September 2015, rocked the German auto giant but has also had an impact on public health, a new study says.

A study published Friday said that pollution from 2.6 million VW cars sold between 2008 and 2015 and rigged to appear eco-friendly will cause 1,200 premature deaths in Europe.



Here is an overview of how the scandal unfolded and of the fallout for the German auto giant:

On September 18, 2015, the US Environmental Protection Agency (EPA) revealed that VW had violated clean air regulations by using so-called defeat devices in hundreds of thousands of 2.0-litre engines in the US since 2009.

The software, used in the Volkswagen, Porsche, Audi, Seat and Skoda brands, helped to make the cars seem compliant with exhaust pollution standards when in fact their emissions were excessive.

Four days later the company admitted that some 11 million diesel vehicles worldwide, including 8.5 million in Europe, had been fitted with the software.

The revelation sent its shares plunging by 40% in two days.

On September 23 chief executive Martin Winterkorn stepped down but insisted he knew nothing of the scam. He was replaced by Porsche chief Matthias Mueller.

As part of its efforts to turn the page on the crisis, the firm suspended some staff and recalled vehicles equipped with the cheating software.

In January 2016 the group pleaded guilty to fraud in the United States, agreeing to pay out more than $22 billion (€20.8 billion) in compensation. VW announced a net loss of nearly €1.6 billion in 2015, its first in 20 years, after setting aside billions to cover the anticipated costs of the scandal.



But it came back into the black in 2016, with net profits of €5.1 billion.

The company has settled most claims in the United States, but is still not out of the legal woods.

It has made provision for €22.6 billion in its accounts since the start to meet the legal costs of the affair.

Some experts, however, estimate that the affair will cost the company €25-35 billion.

Despite its dented image, in 2016 VW overtook Japan’s Toyota to become the world’s top-selling automaker, with sales of 10.3 million vehicles. It has set the aim of becoming the leader in electric cars by 2025.

Published in The Express Tribune, March 6^th, 2017.

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