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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.