Volkswagen Group chief executive Martin Winterkorn has resigned, six days after the car giant admitted to cheating US emissions tests for the last six years. He accepted responsibility for the crisis but insisted he was “not aware of any wrongdoing” on his part. The fact he stayed on for so long is perhaps the only surprise in this disgraceful story of corporate deception.
With €22 billion wiped off the firm’s market value on Monday alone – more than the total market capitalisation of Renault – his departure was inevitable.
Winterkorn is unlikely to be the last casualty of the crisis. Criminal charges will almost certainly be brought after the Supervisory Board revealed it had called in the state prosecutor to get to the bottom of the scandal.
While Winterkorn pleads ignorance in his resignation statement, the timeline of this scandal is slowly starting to emerge and it will be very interesting to see who knew what and when. There may be political angles to the story .
VW’s deliberate malfeasance has destroyed long-established trust in one of Germany’s iconic brands, wiped billions off its market value and has cast a shadow over all European car brands. It certainly scuppers any hopes some firms may have had of introducing their diesel models to the US market.
Campaign groups have long claimed that car firms are cheating on the official tests, which they also say bear little relationship with the emissions in real-life driving.
VW’s deception relates to the toxic emissions from diesel engines – nitrogen oxide emissions (NOx). These harmful emissions have been a focus of attention in the US for many years, but were largely ignored by European legislators, despite the prevalence of diesel cars on this side of the Atlantic.
This scandal may finally focus the minds of legislators on the potential health issues related to NOx emissions. Any reform of the testing process based on real-life results is likely to see official emissions levels rise for all cars. While the immediate effect isn’t going to cost Irish motorists, Winterkorn’s legacy may ultimately be linked to a hike in motor tax.