Volkswagen customers in the UK with cars affected by the emissions scandal will not receive compensation, as previously thought.
In December, CEO Matthias Mueller said at a press conference broadcast globally: “We’re working on an effective package for all our customers. There will be an attractive package, let’s call it compensation, for the reduction in value of cars.”
However, it has now been confirmed that UK owners will not be compensated. A spokesman told Auto Express: “There won’t be compensation. All the indications are that residual values are unaffected.” And he claimed that the confusion had been caused by “a slight mistranslation”.
Speaking before the Environment, Food and Rural Affairs Committee, Paul Willis, Managing Director of Volkswagen Group UK, said: “To pay compensation there has to be a loss, and at this stage I see no reason for there to be a loss. Our engineers tell us there will be no difference in fuel consumption or driveability.
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“So the only other area is on the question of residual values. I, at the moment, have seen no clear evidence of adverse impact on residual values. So when I say that there is no loss, then there is also no need for compensation.”
Willis, did however, add that in certain cases, a “support package” may be made available to customers in the form of a goodwill gesture – for example if an owner living in a remote area faces a lengthy journey to get the necessary remedial work done on their car.
Yet VW may not be off the hook completely. The UK Government has stated that if evidence of consumers suffering from falling residual values or vehicle performance emerges, VW would be liable to compensate owners.
Transport spokesman Viscount Younger of Leckie said: "The Competition and Markets Authority has not opened a formal investigation but is continuing to assess whether there is evidence of consumer harm."
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As reported previously, US owners will receive $1,000 gift cards by way of compensation, but the spokesman said they faced a “different set of circumstances”. In the UK, VW has introduced ‘loyalty bonus’ discounts to existing owners or their family members registered at the same address who buy a new VW. The discounts range from £400 to £1,500 off selected vehicles.
VW UK is currently working through a phasing document which will determine exactly when each model affected will receive its fix. Work on Amarok pick-ups is set to start this month, with the first cars to be worked on in March. Owners will be informed by VW UK, or their dealer, or both, when they are required to take their cars in.
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The changes made as a result of the recall will have "negligible effect" on customer cars in terms of performance or fuel economy, with Mueller explaining that owners "won't be able to feel it."
The chairman of the Volkswagen supervisory board, Hans Dieter Pötsch, has also confirmed that VW Group will introduce real world emissions figures backed by independent testing authorities for their vehicles in the future, and will place greater scrutiny on its software development.
VW to face lawsuits from around the world
The VW Group is slowly starting to face lawsuits from all corners of the world. News of the US Justice Department suing VW over the 600,000 vehicles sold in the States were soon followed by VW's own shareholders lawyering up.
German law firm Nieding + Barth said it will seek hundreds of millions of euros in compensation from VW due to the falling VW share price as a result of the emissions scandal. The firm represents 66 institutional investors, including some from Great Britain, and thousands of private investors.
VW's share price has fallen by nearly a third since the emissions scandal broke out in September, wiping out £16billion from shareholders. No official sum for the piling lawsuits has been announced, but experts estimate them to total in the multiple billions.
How the emissions scandal evolved
The initial ‘dieselgate’ emissions scandal started back in September when the US Environmental Protection Agency (EPA) found that the VW Group had built diesel cars with ‘defeat device’ software designed specifically to cheat emissions tests.
Around 11 million diesel cars with EA 189 1.2, 1.6 and 2.0-litre pre-Euro 6 diesel engines have been identified by Volkswagen as containing the ‘defeat device’ software. In the UK, over 1.1 million cars were sold with the malevolent software on board. The Group issued a worldwide recall to fix all affected VW, SEAT, Skoda andAudi vehicles.
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Shortly afterwards, the VW Group also announced that an internal investigation had revealed that official CO2 and fuel economy figures for 800,000 of its vehicles contained irregularities. This was the first time VW admitted its Euro 6 compliant engines have been manipulated, and also widened the issue from diesel engines only to include petrol cars too.
The storm surrounding VW has reached the upper echelons of the corporate hierarchy with a shuffle in managerial positions, culminating in the former-CEO Martin Winterkorn resigning and being replaced by ex-Porsche boss Matthias Muller.
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The new management board has taken up defensive positions by setting aside £4.7bn to cover the damages, but CEO Muller has since admitted the Group does not have a clear estimate on how much the emissions scandal will eventually cost them.
Speaking at the Wolfsburg press conference in December 2015, Hans Dieter Pötsch told media that the emissions scandal harks back to 2005 when VW launched its diesel offensive in the US. It proved impossible for the EA 189 engine to meet the strict US emissions targets, leading to a group of employees to incorporate the engine with software to give two different emissions readings.
The VW bosses also admitted there was a culture of rule-breaking being tolerated within certain areas of the company that led to the misconduct and shortcomings of individual employees and weaknesses in some processes.
Although other car companies were all quick to state no such culture exists within their factories, news of Renault recalling 15,000 vehicles after the French government found their emissions above acceptable limits has added to the public scepticism.
VW recalls to start from March 2015 onwards
Volkswagen and the German Motor Industry Federation (KBA) – the federation in charge of authorising VW’s emissions scandal fix plan – has come up with technical solutions to the VW emissions scandal. 2.0-litre diesels will receive a software tweak, while vehicles with a 1.6-litre diesel will need to be fitted with a ‘flow transformer’ device to help the engine’s computer calculate the right amount of fuel and air being combusted.
This means around 400,000 UK cars will require mechanical changes - but VW says they should take less than an hour to make at dealerships. The software update for 2.0 engines will take around half an hour. A fix for the 1.2-litre unit is still under consideration.
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VW confirmed the fix will not affect the performance or fuel economy of the cars, while Mueller also said the cars will pass the European emissions test (without cheating) after the fix has been installed.
Volkswagen has published the following timeline for UK recalls..
Though UK vehicles get by with software tweaks, vehicles in US and will need many more physical changes to the catalytic converters and the Selective Catalytic Reduction (SCR) AdBlue urea injection systems to pass the strict North American emissions criteria. This is going to take longer, and the Group announced it still does not have a confirmed timeline for North American owners.
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Scroll down for everything you need to know about the VW emissions scandal...
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Check if your VW Group car is subject to the recall
The VW Group has said that the following quantities of UK vehicles are set for a recall...
- • VW passenger cars - 508,276
- • Audi - 393,450
- • SEAT - 76,773
- • Skoda - 131,569
- • VW commercial vehicles - 79,838
Total VW Group cars set for UK recall: 1,189,906
The websites below let owners of VW Group cars check whether or not their models are fitted with the EA 189 engine and subject to the recall. All you need is your car's VIN number which should be located at the bottom corner of the windscreen on the driver's side or in the car's service book.
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