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Volkswagen Scandal Underlines Need for ESG Analysis

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On Monday, November 19, at CET, Frank Witter, Member of the Board of Management of Volkswagen AG, responsible for Finance and IT together with Dr. Christian Dahlheim, Director Group Sales, provided information on the 5-Year Planning Round and . Volkswagen Group China (VGC) (大众汽车(中国)) is division of the German automotive concern Volkswagen Group in the People's Republic of China.

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In my run up, the temperature went up to deg which is way higher than the usual Prior to its birth in Mexico, Volkswagen ran an advertisement showing a black Bug zipping around a forest floor showing great agility in avoiding obstacles and making turns around bends. In reality, the Bug is not much different but not what most would be led to believe after watching that advertisement. One would imagine that superior cornering ability means excellent road traction ….

As to how well the Bug glides over the sometimes-less-than-perfect Malaysian roads, it does so pretty well. With a three-spoke steering wheel that traces its roots back to its grandpapa, the new Bug allows any human to experience the full pleasure of driving it by conveying the road conditions and traction of its tires perfectly to its driver.

As snug as a virgin can be sitting here, babe! Definitely one of the best seats from VW. The back is snug too …. Best treat the Bug as the Love Bug for couples only. And being a couples only car, you get pretty decent boot space for the 2 of you to disappear somewhere …. Basic it may be but the most affordable Beetle is well equipped with the following safety features: To hatch and bring home a Bug would cost you RM, without insurance, road tax, etc and comes with a 5 year unlimited mileage warranty.

Once again, kensomuse is extremely honored to have Mr Khairulzaman Abdul Razak, the man responsible for all the beautiful shots you see here. Need we say more? You can contact Khairul at his email here: Unsourced material may be challenged and removed.

August Learn how and when to remove this template message. This article needs to be updated. Please update this article to reflect recent events or newly available information. Retrieved 6 June Volkswagen emissions testing scandal. Automotive industry in China. Automotive industry Economy of China Transport in China.

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Views Read Edit View history. This page was last edited on 28 November , at By using this site, you agree to the Terms of Use and Privacy Policy. Division of Volkswagen Group. Beijing , People's Republic of China. The award was rescinded in early October In , a Swedish researcher criticized the New European Driving Cycle standard for allowing large emission differences between test and reality. The project was shut down in , despite preliminary tests indicating gaps between emissions from lab tests and real world tests of about 10 to 20 percent.

In , the European Commission's Joint Research Centre published a report which found that all tested diesel vehicles emitted 0. Sensors and electronic components in modern light-duty vehicles are capable of 'detecting' the start of an emissions test in the laboratory e. Some vehicle functions may only be operational in the laboratory, if a predefined test mode is activated.

Detecting emissions tests is problematic from the perspective of emissions legislation, because it may enable the use of defeat devices that activate, modulate, delay, or deactivate emissions control systems with the purpose of either enhancing the effectiveness of these systems during emissions testing or reducing the effectiveness of these systems under normal vehicle operation and use.

While the use of defeat devices is generally prohibited, exceptions exist in cases where it is necessary to protect the engine against damage and to ensure safe vehicle operation EC, These exceptions leave room for interpretation and provide scope, together with the currently applied test procedure, for tailoring the emissions performance [ The European Commission and European governments could not agree upon who was responsible for taking action.

Respirable suspended particles with a diameter of 10 micrometres — also known as PM 10 including diesel particulates — halved since despite the increased number and size of diesel cars in the UK. The independent body International Council on Clean Transportation ICCT commissioned a study in and obtained data on 15 vehicles from three sources. German said they chose to put US vehicles through on-the-road tests because their emissions regulations are more stringent than those in the European Union.

The ICCT expected the cars to pass, and thought they would be able to use the results to demonstrate to Europeans that it was possible to run diesel cars with cleaner emissions.

They wanted to test a Mercedes as well, but could not obtain one. The three vehicles were all certified at a California Air Resources Board facility before the tests [26] as falling below the emissions limits when using the standard laboratory testing protocols. The emissions far exceeded legal limits set by both European and US standards. One of the testers said, " This standard for nitrogen oxide emissions is among the most stringent in the world. For comparison, the contemporary European standards known as Euro 5 "EU5 compliant", [3] [5] — models and Euro 6 models only limit nitrogen oxide emissions to 0.

Volkswagen's "defeat device" is specially-written engine-management-unit firmware that detects "the position of the steering wheel, vehicle speed, the duration of the engine's operation, and barometric pressure" [84] when positioned on a dynamometer using the FTP test schedule.

The EPA's NOV alleged that under normal driving conditions, the software suppressed the emissions controls, allowing better fuel economy, at the expense of emitting up to 40 times more nitrogen oxides than allowed by law. Shin Bet apparently knew about the scandal early. Primor confirmed that the meeting took place, but both Primor and Diskin denied tipping off Piech.

According to the EPA, Volkswagen had insisted for a year before the outbreak of the scandal that discrepancies were mere technical glitches. The first sign that Volkswagen was ready to come clean reportedly occurred on 21 August at a conference on green transportation in Pacific Grove, California , where an unnamed company representative approached Christopher Grundler, director of the EPA Office of Transportation and Air Quality, and surprised him by informally admitting that the company had been deceiving regulators.

Formal acknowledgement of the deception was made by Volkswagen executives in Germany and the United States to EPA and California officials during a 3 September conference call, during which Volkswagen executives discussed written materials provided to the participants demonstrating how Volkswagen's diesel engine software circumvented US emissions tests.

That admission came after the EPA threatened to withhold approval for the company's Volkswagen and Audi diesel models. He also said the board only found out about the problems "shortly before the media did", and expressed concerns over "why the board wasn't informed earlier about the problems when they were known about over a year ago in the United States". Volkswagen announced that 11 million cars were involved in the falsified emission reports, and that over seven billion dollars would be earmarked to deal with the costs of rectifying the software at the heart of the pollution statements.

Bosch provided the software for testing purposes and warned VW that it would be illegal to use the software to avoid emissions compliance during normal driving. On 28 September , it was reported that VW had suspended Heinz-Jakob Neusser, head of brand development at its core VW brand; Ulrich Hackenberg, the head of research and development at its brand Audi who oversees technical development across the VW group; and Wolfgang Hatz, research and development chief at its sports-car brand Porsche who also heads engine and transmissions development of the VW group.

On 3 November , VW revealed that its internal investigation found that CO 2 emissions and fuel consumption figures were also affected by "irregularities". In November , California regulators claimed to have discovered software installed on some Audi models that allowed the manufacturer to cheat CO 2 emissions during standard testing, thereby also masking the cars' contribution to global warming. These are prohibited in the United States, however the software is legal in Europe.

On 29 September , Volkswagen announced plans to refit up to 11 million affected vehicles, fitted with Volkswagen's EA diesel engines, including 5 million at VW brand, 2. SEAT said that , of its diesel models were affected. In Europe alone, a total of 8 million vehicles are affected. In Portugal, VW said it had sold 94, vehicles with the software.

As the rules violation involved enabling emission controls during testing, but turning it off under normal conditions to improve performance or fuel mileage, it has been speculated that the software update might make cars perform less efficiently and impair fuel economy ; according to VW, however, its proposed solutions will be designed to achieve legal EU emissions compliance without impairing engine performance or consumption.

The company also announced a review of all of its brands and models, including its supercar marque Bugatti. On 8 October , Volkswagen US CEO Michael Horn said in testimony before the US Congress that it could take years to repair all the cars, especially the older models, due to the required complex hardware and software changes.

He said that the fixes would likely preserve fuel economy ratings but, "there might be a slight impact on performance". It also announced plans to accelerate the development of electric cars and plug-in hybrids, as well as petrol, instead of diesel engines for smaller cars. On 12—13 October , Volkswagen Group vehicle drivers in the UK started receiving notification letters, to "rectify the issue".

At the beginning of October VW suggested to let car owners decide whether their cars would be recalled for handling. VW then decided to recall around 8. The German authorities require that VW removes the software and that VW ensures that emission rules are fulfilled. As of February , there were three sizes of affected diesel engines, and more than a dozen variations to the repairs exist, prompting VW to roll out the recalls in waves for each cluster of vehicle; the first model to be repaired was the low-volume Volkswagen Amarok.

German motoring journal Auto Motor und Sport tested two Amarok TDI pickups pre and post software update and found that whilst engine power had remained the same, fuel consumption had increased by 0. In France, the MediaCom media agency, which buys advertising for Volkswagen, warned the French newspapers on 22 September that it would cancel planned Volkswagen and Audi campaigns in case they would cover the emission violations.

On the occasion of German Unity Day , Volkswagen launched an ad campaign in German Sunday newspapers, that it wanted to express its joy about the 25th anniversary of German reunification, its pride about having shaped the country together with all people for the last 25 years, to give thanks for the confidence of the customers it had experienced during all this time and that it wanted to thank all its employees and trade partners in Germany, and that in one sentence, that "it would do everything to win back the confidence of its customers".

In September , Volkswagen's Belgian importer, D'Ieteren, announced that it would offer free engine upgrades to customers who had ordered a vehicle with a diesel engine which was likely to have been fitted with illegal software. In the United States, VW withdrew its application for emissions certification for its diesel models, leaving thousands of vehicles stranded at ports in October , which the company said contained software which should have been disclosed to and certified by the EPA.

This was a couple of software engineers who put this in for whatever reason All the indications are that residual values are unaffected"; [] the company, which continued to face pressure from E. On 21 April , the federal district court for the Northern District of California, which was appointed in December to oversee almost all of the US litigation, including claims filed by vehicle owners and state governments, announced that Volkswagen would offer its US customers "substantial compensation" and buyback nearly , 2.

The study also found that making these vehicles emissions compliant by the end of would avert an additional early deaths. Earlier non peer-reviewed studies published in media sources, quoted estimates ranging from 10 to excess deaths in the United States related to the defeat devices based on varying assumptions.

Since NO 2 is a precursor to ground-level ozone it may cause respiratory problems "including asthma, bronchitis and emphysema ". A peer-reviewed study published in Environmental Pollution estimated that the fraudulent emissions would be associated with 45 thousand disability-adjusted life years DALYs and a value of life lost of at least 39 billion US dollars.

NO x also contribute to acid rain , and visibly brown clouds or smog due to both the visible nature of NO 2 , and the tropospheric ozone created by NO. In October , the Australian Competition and Consumer Commission announced that it will be investigating VW for possible violations of consumer and safety standards. In January , public broadcaster Vlaamse Radio- en Televisieomroeporganisatie reported on Opel Zafira cars having lower emissions after an update compared to before receiving the update.

Opel denied deploying software updates influencing emissions, and the Economic Inspection of the Federal Government started an investigation on the request of Minister of Consumer Protection Kris Peeters.

As of October , Volkswagen Brazil confirmed that 17, units of its Amarok mid-size pickups produced between and and sold in Brazil were equipped with the emissions cheating software. The automaker may still appeal the decision. According to the judge, the purpose was "to compensate the Brazilian society as a collective moral damage of a pedagogical and punitive nature because of the collective fraud caused in the domestic motor vehicle market".

In September , Environment Canada announced that it had begun an investigation to determine if "defeat devices" were installed in Volkswagen vehicles to bypass emission control tests in Canada. Ontario provincial authorities executed a search warrant at Volkswagen Canada offices in the Toronto area on 19 September [] as part of its investigation into the emissions scandal that rocked the company two years ago.

The Ministry of the Environment and Climate Change have charged Volkswagen AG with one count under the province's Environmental Protection Act, alleging the German company did not comply with Ontario emission standards. The allegations have not been proven in court. In July , Volkswagen Group Canada announced plans for its new Electrify Canada subsidiary to launch a network of public fast-charging stations in major cities and along major highways, starting with 32 charging sites in the four most-populated provinces: Ontario, Quebec, British Columbia and Alberta.

Several countries [ vague ] called for a Europe-wide investigation. The resolution urged for tougher emissions tests to be fully implemented in , instead of being phased in between —, as had been originally planned. Also, it was revealed [ by whom? Dutch MEP Bas Eickhout referred to the new test as "a sham", [] while liberal democrat MEP Catherine Bearder described the legislation as "a disgraceful stitch-up by national governments, who are once again putting the interests of carmakers ahead of public health".

In June , documents leaked to the press indicated that in , European Commission officials had been warned by their in-house science team that at least one car manufacturer was possibly using a NOx-related defeat device in order to bypass emission regulation.

Renault and Peugeot's headquarters were raided by fraud investigators in January and April , respectively. As of January , Renault recalled 15, cars for emission testing and fixing. In September former Volkswagen chief executive Martin Winterkorn resigned over the scandal, saying he had no knowledge of the manipulation of emissions results.

One week later German prosecutors launched an investigation against him. The report called the defeat device "not a product failure but a clear case of cheating". On 6 October Italy's regulator of competition announced plans to investigate whether VW engaged in "improper commercial practices" when promoting its affected diesel vehicles.

In December the Dutch consumers authority ACM decided to investigate whether Dutch laws were broken and consumers misled, a report was due by June Norway's prosecutors opened a criminal investigation into possible economic crimes committed by VW. On 28 September , the departments of Environmental Affairs and Transport and the National Regulator for Compulsory Specifications said they still needed to determine whether local cars had been affected by the rigging of US vehicle emissions tests.

As of 19 January South Korea, the world's eighth-largest diesel-car market, planned a criminal case against VW executives. Park Pan-kyu, a deputy director at South Korea's environment ministry said: As of 28 October , a Spanish court had opened a criminal probe against Volkswagen AG, to establish whether the company's actions broke any local laws.

As of 29 September , Sweden's chief prosecutor was considering starting a preliminary investigation into Volkswagen's emissions violations. On 26 September Switzerland banned sales of Volkswagen diesel cars, marking the most severe step taken so far by a government in reaction to the emissions crisis.

The Department for Transport announced on 24 September that it would begin re-testing cars from a variety of manufacturers to ensure the use of "defeat devices" was not industry wide. The vehicles did meet EU5 standards, so it clearly contributed to meeting the EU5 standards in testing". A report on "real world" tests commissioned by the Government published in April showed emissions from 37 diesel engines up to 14 times higher than had been claimed, with every vehicle exceeding the legal limit of nitrogen oxide emissions.

In April , new measures to prevent similar scandals secured final approval from MEPs. The agency would initially focus on one used vehicle of each model, and widen the probe if it encountered suspicious data. It further claimed that VW entities provided misleading information and that material omissions impeded and obstructed ""efforts to learn the truth about the excess emissions".

Schneiderman also complained over VW's slowness in producing documents from its US files, claiming the company "has sought to delay responses until it completes its 'independent investigation' several months from now". On 29 March , Volkswagen was additionally sued by the United States Federal Trade Commission for false advertising due to fraudulent claims made by the company in its promotion of the affected models, which touted the "environmental and economic advantages" of diesel engines and contained claims of low emissions output.

The suit was consolidated into existing litigation over the matter in San Francisco, which would allow the FTC to participate in global settlements over the matter. On 9 September , James Robert Liang , a VW engineer working at VW's testing facility in Oxnard, California, admitted as part of a plea deal with the US Department of Justice that the defeat device had been purposely installed in US vehicles with the knowledge of his engineering team: When he and his co-conspirators realized that they could not design a diesel engine that would meet the stricter US emissions standards, they designed and implemented [the defeat device] software".

In addition, six executives have been criminally charged. He has repeatedly denied any knowledge of the rigged emissions tests. On 25 October , a final settlement was approved by a judge.

About , Volkswagen owners in the US can choose between a buyback or a free fix and compensation, if a repair becomes available. VW will begin administering the settlement immediately, having already devoted several hundred employees to handling the process.

Of the buyback, , had been completed by 18 February with , more to be returned. In March , Reuters reported that , cars from the buyback program have been stored at 37 regional US staging sites; [] some of the first reported sites included: By 27 September at least 34 class-action lawsuits had been filed in the United States [] [] [] and Canada [] [] on behalf of Volkswagen and Audi owners, accusing VW of breach of contract , fraudulent concealment, false advertising, and violations of federal and state laws, and positing the "diminished value" of diesels that will be fixed to conform with pollution regulations, due to possible reductions in horsepower and fuel efficiency.

On 7 October, the Los Angeles Times reported that the number of class-action lawsuits filed had grown to more than On 8 December , the United States Judicial Panel on Multidistrict Litigation issued an order consolidating over class actions against Volkswagen into a single multidistrict litigation , captioned In re: Breyer of the federal district court for the Northern District of California. On 21 January , Judge Breyer held a hearing on the requests by over plaintiff's attorneys for some kind of leadership role in the gigantic Volkswagen MDL, of which over 50 sought to serve as lead counsel or to chair the plaintiffs' steering committee.

On 14 March , Volkswagen AG was sued in Germany for allegedly failing to inform financial markets in a timely manner about defeat devices used in diesel engines.

Owners can also opt to have their car repaired free of charge or can sell it back to the company, who will pay back its estimated value from before the scandal began. Leases can also be terminated without incurring penalty charges. Additionally, should they choose to decline the offer, they are free to pursue independent legal action against the firm. In January , documents obtained by CEE Bankwatch Network provided more details for a European Investment Bank statement that its loans to Volkswagen may have been connected to the car makers use of cheating devices to rig emission tests.

The 'Antrieb RDI' loan was supposedly for creating cleaner drive trains. In , the European Anti-Fraud Office OLAF found that Volkswagen had misled the bank about the car company's use of emissions cheating software, in a scandal that has become known as Dieselgate.

Also in , Hoyer said the bank did not find "any indication" that its loans had been misused. However, six months later news website Politico reported that Olaf had concluded that Volkswagen acquired the EIB loan through "fraud" and "deception". By 22 September , Volkswagen had admitted that 11 million vehicles sold worldwide are affected in addition to the , vehicles with 2.

This software is also said to affect EA and the EA generation of the four-cylinder. This suggests that normal-operation measurements that place the EA NO x emissions between the two standards' limits were readily available at VW headquarters in Germany. According to Müller, the 1. The cars are so diverse that many different solutions are required.

Over one quarter of VW's sales in the US are diesel-powered vehicles. The corporation has chosen a market strategy that emphasizes clean diesel over electric cars or hybrid electric vehicles. The vehicles affected by the recall in the US include the following model years: On 23 September, the stock quickly fell The US sale of Volkswagens was 23, vehicles in November , a

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VW's investigation finds that CO 2 emissions and fuel consumption figures are also affected by "irregularities".

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