FRANKFURT, Germany (AP) — Volkswagen’s flagship brand saw global auto sales fall 5.3 percent in October in the wake of a scandal over cars equipped with software that let them cheat on U.S. diesel emissions tests.It appeared that economic downturns in the BRIC`s countries, Brazil and Russia caused as much or more damage than the scandal to the month’s figures. Volkswagen has been trying to limit sales damage in the United States by offering existing Volkswagen owners $2,000 off if they trade their old car in for a new VW model.For all of Volkswagen’s brands, including SEAT, Skoda, Porsche, Audi and Lamborghini, global sales fell 3.5 percent to 831,3000 in October compared with a year earlier.
Shares down four billion
The Norwegiananks Investment Management(NBIM) have invested 11,7 billion kroner in three Volksagen companies( VW and Audi 9,7 billion, Posche 2,2 billion and M.A.N. 0,8 billion). These shares have decreased with 3,5 billion kroner the last year after the scandal, reports Euroinvestor. But the weak markets in Brazil and Russia have caused more damagae for the Volkswagen share than the software scandal, reports Nordic News.
Elleven Million Cars
Figures released last week showed sales in the U.S. — where the scandal first broke on Sept. 18 — were up 0.2 percent. Sales in North America including Canada rose 3.5 percent from the same month a year earlier. Sales fell 26 percent in Russia and 50 percent in Brazil. The U.S. Environmental Protection Agency says Volkswagen equipped 482,000 cars with software that turned off emissions controls and enhanced performance when the cars were not being tested. The company says up to 11 million cars have the deceptive software, and adds that it has uncovered «irregularities» in measurements of how much carbon dioxide the cars emit. Carbon dioxide is a greenhouse gas blamed by scientists for global warming, and faces increasingly strict limits in Europe.
Offering Vouchers
Volkswagen is offering $1,000 in gift cards and vouchers as a goodwill gesture to owners of small diesel-powered cars involved in an emissions cheating scandal.The offer announced Monday goes to owners of 482,000 cars in the U.S., many who are angry at the company because they paid extra for the cars to be environmentally sensitive without losing peppy acceleration.VW is working on a fix for the cars, which are equipped with software that turns on pollution controls during government tests and turns them off while on the road. The U.S. Environmental Protection Agency says the cars, with 2-liter four-cylinder diesel engines, emit 10 to 40 times the allowable amount of harmful nitrogen oxide while being driven.
Roadside Assitance
The offer also includes free roadside assistance for the diesel vehicles for three years. «We are working tirelessly to develop an approved remedy for affected vehicles,» said Michael Horn, VW’s U.S. CEO, said in a statement. «In the meantime we are providing this goodwill package as a first step towards regaining our customers’ trust.» VW said that its Audi luxury brand would launch the same program on Friday. Meanwhile, Germany’s Transport Ministry said Monday that of the 2. 4 million vehicles being recalled for fixes in Germany, regulators «currently expect that approximately 540,000 will also need hardware changes» as well as software changes. It says Volkswagen will inform owners of the details.
Recalling Cars
The company is recalling 8.5 million 2009-2015 model year cars with the software across Europe, starting next year. It says about 11 million cars worldwide have the software. Also Monday, Fitch, the credit rating agency, downgraded Volkswagen’s debt by two notches to reflect the potential financial costs of the scandal as well as the management problems that led to the crisis in the first place.The downgrade follows a similar move by Moody’s last week. Fitch cited the «possibility of further problems still to be uncovered» by the company’s internal investigation as well as «relatively weak corporate governance.»To get the gift cards and vouchers in the U.S., owners will not be required to sign anything giving up their right to sue Volkswagen or forcing them into arbitration, spokeswoman Jeannine Ginivan. «There are no strings attached,» she said.
Reluctant to Diesel Fuel
The fix of the 2-liter diesels in the U.S. could wind up hurting performance or perhaps fuel mileage, the two main reasons why people buy the diesels. More than 200 class-action lawsuits have been filed in the U.S. against VW alleging that the scandal caused the diesel cars to drop in value.Early in October, Kelley Blue Book said the average resale value of Volkswagens with two-liter diesel engines fell 13 percent since mid-September, when VW admitted it cheated on the tests. Used car values often drop in the fall, since demand for them is stronger in the summer. But VW’s diesel decline is unusually large. The price of gas-powered Volkswagens dropped 2 percent in the same period.
Cheating with Software
Volkswagen already is offering $2,000 to current VW owners to trade in their cars for new vehicles, and the gift cards and vouchers would add $1,000 to that. The scandal expanded last week, when the EPA accused VW of cheating with different software on larger six-cylinder diesels in about 10,000 vehicles. VW also acknowledged finding irregularities in carbon dioxide emissions in 800,000 other vehicles, all outside the U.S. Some of those were powered by gasoline engines,.The scandal drew protests from the Greenpeace environmental group Monday outside the main entrance to VW’s headquarters in Wolfsburg, Germany. Protesters unfurled a banner reading «Das Problem» — a play on the carmaker’s marketing slogan «Das Auto.»In addition to their banner, the Greenpeace protesters also held a «C» and a «2» on either side of the round VW logo at the factory entrance, spelling out «CO2.»Dee-Ann Durbin in Detroit and Carlo Piovano in London contributed to this report from Associated Press.
