'Truth in engineering" is the tagline for Audi's advertising campaign in the US. It's a virtue that seems to have been in short supply at the car brand and its parent Volkswagen. As the ads ran on US television over the weekend VW chief executive Martin Winterkorn was apologising for a massive deception by the firm over emissions tests on its diesel cars.
On Friday VW revealed it used hidden software to consistently cheat on US emissions tests carried out by the US Environmental Protection Agency. The software could detect when the car was being tested and ran treatments to reduce nitrogen oxides. Once out on the road, the cars were discovered to produce pollutants up to 40 times the legal limits.
Yesterday the car giant admitted the scandal affects some 11 million vehicles worldwide, thereby turning a US scandal into a global one. The US Justice Department is reportedly launching a criminal investigation into the scandal, while fines could reach up to $18 billion. Regulators in other countries are now scrambling to see whether similar software was used to deceive their testing regimes. Shares in Volkswagen have tumbled 33 per cent since Friday's close wiping out €24 billion in market value and the future of its chief executive is in doubt. Its sales in the US will be hit at a time when the firm was already trying to tackle stalling growth in China.
The implications stretch further afield than the VW empire, however. Campaign groups have long accused car firms of cheating on the official tests, which they also say bear little relationship with the emissions in real-life driving. Last May, the EU decided to require on-road testing as part of the approval process for new passenger cars. This may work towards providing more trustworthy emissions data.
For Irish motorists, reform of the testing system will carry a financial cost, given that our car tax regime is based on emissions. VW’s disgraceful deception may ultimately lead to more accurate test results, but also higher new car prices and motor tax for motorists.