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VW scandal: the winners and losers, from carmakers to car owners
Gwyn Topham Transport correspondent Friday 30 October 2015 18.43 GMT Last
modified on Friday 30 October 2015 22.01 GMT
For the first time in 15 years, Volkswagen’s quarterly accounts have landed in
the red. Results published by the German car giant on Wednesday showed a loss of
€3.5bn (£2.5bn) for the three months until 30 September – the month when the
emissions scandal erupted. VW set aside €6.7bn to deal with the fallout from the
11m vehicles worldwide whose diesel engines were secretly programmed to cheat
tests and mask the pollution they caused, although the final bill could run into
tens of billions.
Yet VW’s underlying sales are reportedly robust – and while the company has
apologised and spoken of its mission to regain trust, it still expects to ride
out the storm. Six weeks after one of the world’s biggest ever corporate
scandals broke, how has the world changed for the other players in the story?
The campaigners
Brussels-based thinktank Transport and Environment had warned for years about
rigged tests but few listened before September. Jos Dings, its director, laughs:
“I could say it changed everything overnight, but in the first vote two days ago
on real driving emissions, some of our dearest member states – including Britain
and Germany – stuck, in an inexplicable way, to short-term measures.” The
European commission has delayed more stringent tests by a year, allowing engines
to emit more than twice the legal limit of nitrogen oxides until 2021.
Dings says: “That was the first concrete test and a very disappointing one.”
But, he says: “We have more friends than we used to – people recognise that we
got this right. We are a very small outfit, and there are hundreds of lobbyists
from the car manufacturers running round here, so it’s bloody hard work.”
Andrew Pendleton, head of campaigns at Friends of the Earth, says the crisis
changed things “for a short time”, but the story never quite got to the issue of
air pollution. “For me, what sums it up is the statement of [VW chief executive
Matthias] Müller in his first conference: ‘No one died’. But knowingly putting
vehicles on the road that issued more toxic pollutants than they should have
will have led to many more deaths. People have died because of VW’s actions, but
also because of the negligence and intransigence of the regulator and the
politicians.” He hopes the scandal will give new opportunity to campaigners: “We
can ally with motorists who’ve been done – a lot of them bought vehicles they
thought were cleaner – and all air-breathing citizens. People are waking up to
the risks.”
Richard Lloyd, executive director of Consumer group Which?, says almost 70,000
people have now signed up to their Come Clean on Fuels campaign for rapidly
overhauled, independent testing. “This scandal has rocked trust in the motoring
industry, with over three-quarters of drivers saying they want new testing
brought in as soon as possible to restore confidence in manufacturers’ claims.”
The motor industry
British demand for diesel cars appeared to remain strong in the immediate
aftermath, according to September registration figures from the Society of Motor
Manufacturers and Traders (SMMT), but there is not enough data yet to be sure,
says David Bailey, professor of industrial strategy at Aston University. “The
big issue is whether it heralds a shift away from diesel – and that’s going to
take a while to play out. It’s a seismic moment for the industry and
particularly the big European manufacturers who have done a lot of work on
diesel: technologically, they have they made the wrong bet.”
Some analysts believe fears of brand damage in Europe are overstated but Bailey
says: “In the US it’s very different: VW have killed their diesel market and it
has left them in a very difficult position.”
For British manufacturer Jaguar Land Rover, the timing of VW’s woes was ominous,
as it unveiled two new diesels in America. However, a spokesman said: “We did
launch the Range Rover Td6 and Range Rover Sport Td6 in late September as
planned and while it is too early to tell what, if any, long-term impact there
will be on the US market, we are pleased with the early sales.”
In the UK, one major car dealership, Lookers, reported continuing profit growth
on Friday, leading the City analysts at Peel Hunt to conclude: “While some
suggested that the VW crisis would have a major impact on the motor trade,
[this] suggests that its progress remains strong ... the VW nerves are now
soothed.”
The shareholders
VW shares lost around one-third of their value in the first two days of trading
after news of the scandal broke, and remain at roughly the same level now. Simon
Dluzniak, of lawyers Bentham Europe, says his firm is one of several close to
finalising claims on behalf of global investors for damages from VW for
non-disclosure of critical information. Some reports have suggested that the
damages could reach €30bn; Dluzniak is more cautious but says it could “run into
billions of euros”. Some shareholders on Bentham’s books – institutions not
individuals – have lost millions.
Meanwhile, ShareAction, a pressure group that co-ordinated letters from major
investors requesting greater clarity on lobbying, says VW’s actions has prompted
other shareholders to scrutinise companies. Chief executive Catherine Howarth
said: “The scandal has drawn attention to the need for investors to practice
active stewardship over the companies they invest in, to avoid plummeting share
prices as a result of reputational risk.”
The lawyers
London-based Leigh Day has now registered around 6,500 potential clients who
drive affected vehicles with a view to a class action for compensation. An
official said: “It’s hugely interesting for us, and we’ve brought in more people
to deal with the workload. But we remain frustrated: we’d have expected VW to
have told their customers exactly how they’d solve this issue by now. When you
strip everything away, there’s very little information. People are worried.”
The VW drivers
Owners of affected vehicles should be compensated for the reduction in value,
the transport secretary, Patrick McLoughlin, said this week. But British drivers
remain a long way from reassured.
Simon Jacobs, 53, an employee engagement consultant from Hammersmith, London,
bought his first new car, a Golf Cabriolet VW, in April 2014 for £25,000. “It
was sold to me as the greener choice. I’m bothered that it’s many times more
toxic than they’d said. The letter from VW that came to me and 1.2m others about
two weeks ago made me furious. I wanted them to say sorry, we lied to you – but
we’re a long way off that. It doesn’t offer to change your engine or your car,
which is worth a fraction of what I paid for it and is poisoning people.”
While motor industry estimates of the drop in value for affected VW brands have
been in the region of 2% to 5%, others believe their prices have plummeted.
Another driver of an affected Seat vehicle, who has been trying to sell his car
and did not want to be named, said: “It’s blighted. The valuation services are
wildly inaccurate and don’t have a bearing on the reality of resale.”
Meanwhile, drivers are taking action to clean up their own engines: Halfords
said that sales of fuel additives to tackle diesel dirt have trebled in the last
month.