VW emissions crisis: UK to retest vehicles as owners call in lawyers - as it happened

Graeme Wearden (until 2pm) and Nick Fletcher

from on 2015-09-24 17:07 (#ND8Y)

Rolling coverage of the Volkswagen emissions scandal

6.07pm BST

Here's more from London-based law firm Leigh Day on the potential claims for UK customers following the VW emissions scandal. The firm's Bozena Michalowska-Howells said:

If it emerges that these cars in the UK passed tests because of this software, with emissions higher than legally permitted on the roads, then this is not only a breach of contract but a flagrant breach of EU emissions regulations, which specifically prohibit the use of defeat devices. Consumers are thus entitled to bring claims for compensation directly against VW.

In the event of a UK recall, Volkswagen should initiate contact with its customers to make arrangements concerning a repair. Consumers could be entitled to seek compensation for any increased fuel costs, depreciation of vehicle value, out of pocket expenses and costs associated with future repair including potential increases in Road Tax.

5.47pm BST

UK motoring organisation the RAC has welcomed the government's investigation into emissions tests. RAC chief engineer David Bizley said:

While there is no evidence that other manufacturers have been seeking to defeat emissions tests, news that the Government is launching its own investigation should go some way towards restoring battered consumer confidence.

The VW revelation is now shining an uncomfortable light on the emissions testing system, parts of which have been recognised for some time by all parties to be well past their 'sell by' date.

5.24pm BST

With shares in motor manufacturers falling - VW apart - and further declines in commodity prices due to worries about economic growth, particularly in China, it was another down day for stock markets.

In the US poor results from Caterpillar added to the gloom, ahead of a speech by Federal Reserve chair Janet Yellen. The final scores showed:

5.17pm BST

Germany's Dax has closed down 1.9%, hit by the latest concerns about the country's car manufacturers. BMW led the way lower after a report some of its diesel cars had exceeded emissions standards in tests, although the company said it was unaware of the tests mentioned.

However VW itself edged higher as the company acted to shake up its management in the wake of the scandal.

4.57pm BST

Here's our report on the UK plans:

The British government is to set up its own inquiry into car emissions and testing - including rerunning lab tests on suspect engines and conducting on the road emission tests.

It had called on the European Commission to carry out a Europe-wide investigation into the industry in the wake of the VW test-rigging scandal.

4.39pm BST

The UK department for transport says it will start re-testing cars from different manufacturers for emisssions. It says the regulator is working with manufacturers to make sure the VW cases are not an industry wide problem.

Dept for Transport announces it is to start re-testing cars from different manufacturers to ensure #VW scandal "is not industry wide"

4.29pm BST

Matthias Mi1/4ller, the chief executive of Porsche, has been the odds-on favourite to become the new boss of Volkswagen to replace Martin Winterkorn and now the Wall Street Journal is reporting that he will indeed get the top job.

Breaking: Porsche CEO Matthias Muller to become new Volkswagen CEO, person familiar with the matter says http://t.co/Wen9Ecs6SG

4.24pm BST

And here's piece of video on the VW scandal, what the company did and why:

4.17pm BST

And the fallout continues. The European Commission has said there would be "zero tolerance" on car emissions fraud, while the Russian technical watchdog has asked for information from Volkswagen about its diesel engines.

Meanwhile Moody's is the latest ratings agency to change its outlook on the company to negative.

Moody's affirms Volkswagen's A2/P-1 ratings and changes the outlook to negative following EPA's notice of violation https://t.co/5UGd9sJml4

3.39pm BST

A reminder of what VW has actually done and how its defeat device managed to cheat emissions tests:

3.38pm BST

Volkswagen needs to change its corporate culture according to the company's works council (which at this point seems a pretty self evident comment.)

In a letter to employees, the council said it would discuss with management how to cope with the costs arising from the scandal, and how to accelerate its efficiency drive. But it says it will do everything possible to make sure jobs will not be affected.

3.33pm BST

If you have bought a VW car in the UK, the company has so far said very little about how the emissions scandal could effect you. Dealers are telling customers it is business as usual. But should you be worried? Here's our Q&A:

3.25pm BST

France is planning to carry out tests to make sure cars on its roads are not equipped with the software which VW used to fake emissions tests.

After a meeting with carmakers Renault and PSA Peugeot Citroen, the country's environment minister Segolene Royal told BFM television:

Random tests will take place to establish cars are not equipped with fraudulent software.

3.09pm BST

Volkswagen adverts routinely used to boast about the company's reliability and efficiency, which looks a bit ironic now. Here's some of the best from the archive:

2.52pm BST

VW will dismiss the research and development chiefs of Audi and Porsche, and US chief executive Michael Horn, Reuters is reporting.

Audi R&D boss Ulrich Hackenberg and Porsche's Wolfgang Hatz, as well as Horn, will be dismissed at Friday's supervisory board meeting, a source told Reuters.

2.26pm BST

Volkswagen could have its long term credit rating downgraded in the wake of the a6.5bn charge the company has set aside to deal with the crisis, says Standard & Poor's.

The agency has put VW's A rating on creditwatch with negative implications, and said it anticipated the company would face substantial penalties and costs to resolve the problem.

2.13pm BST

Here's our report on the possible payoff for the former VW boss who quit on Wednesday:

The former chief executive of Volkswagen, Martin Winterkorn, will net a a1m (740,000) annual pension from a a28.5m pot held with the disgraced carmaker, and could be in line for a a3.2m payoff after quitting on Wednesday.

Winterkorn, who was one of Europe's highest-paid executives, with a salary of a1.6m boosted to nearly a16m last year with bonuses and loyalty payments, finally fell on his sword as the extent of the emissions test-rigging scandal emerged.

2.07pm BST

Italy has also opened an investigation into whether VW's manipulation of emissions data affected cars in the country, the latest probe into the company. It was launched by the prosecutor's office in Turin.

VW has admitted 11m of its cars around the world could be involved.

2.01pm BST

Meanwhile Italy has launched a study into possible health risks associated with diesel emission filters used in cars throughout the EU.

The worries pre-date the current VW scandal but they add to the general mood over uncertainty over diesel. Reuters reports:

The concern over the filters, raised by an Italian prosecutor, pre-dates the Volkswagen emissions scandal and relates to devices which were installed by various car makers from 2008 onwards.

The health ministry decided to investigate the matter after Rome's chief prosecutor wrote to the government in July, referring to expert opinion alleging the filters increased the risks to health of diesel emissions rather than reducing them, and saying they posed an "extreme danger".

1.52pm BST

Germany's main stock index, the DAX, has now slumped by 200 points, or 2.1%, to 9,407, as the Volkswagen scandal hits confidence in German industry.

Shares in BMW are weak again today on speculation that its diesel emissions test results may also have been doctored to appear eco-friendly and thus saleable in the world's second largest but arguably the most important car market; the US. While this adds to this week's VWgate revelation, confirmation of yet another major carmaker having potentially been 'at it' will hardly come as a surprise for such a highly competitive industry.

As more details emerge about the extent to which VW, BMW and likely others may have gone to pull the wool over regulators' and of course the public's eyes, it begs the question of how 'polluted' the industry will turn out to be.

1.03pm BST

Today's fall in BMW's share price shows that investors are very nervous about "diesel engines, compliance and future regulation," Arndt Ellinghorst, head of Automotive Research at Evercore ISI, told Reuters.

12.50pm BST

BMW has insisted that it has not not manipulated emissions tests, following Auto Bild's claim that some of its vehicles were exceeding legal limits.

A spokesman said the company isn't aware of these test results cited, adding:

"There is no difference in the treatment of exhaust emissions whether they are on (test) rollers or on the road.

12.33pm BST

Britain's transport select committee is set to launch an inquiry into the scandal and its wider lessons for testing, which could see ministers and VW executives in Britain hauled before MPs, our transport correspondent Gwyn Topham reports.

"Action must be taken to give the public confidence in the testing regime in relation to emissions, safety, recyclability and other factors.

There are questions over whether the testing authorities commissioned by motor manufacturers are truly independent."

12.21pm BST

Pressure is growing on the UK government to follow up its call for a European Commission inquiry, after the Guardian revealed that the Department for Transport had been lobbying in private for less rigorous tests.

Environmental law organisation ClientEarth has written to the DfT demanding it take action to establish whether VW's use of "defeat devices" was part of wider industry practice, and to release all information held on the real-world emissions performance of cars licensed for sale on UK roads.

"Five days into the diesel emissions scandal the government has taken no action to reassure the public that cars on our roads meet even the lax standards required by EU law. The industry has shown it cannot be trusted. We cannot wait for action from the EU.

First responsibility for protecting our health lies with our own government. The public must know the full scale of the problem and urgent action must be taken to fix it."

12.19pm BST

Here's our full guide to the potential candidates for the toughest job in industry today - steering Volkswagen out of the crisis.

12.09pm BST

Matthias Mi1/4ller, the CEO of Porsche, is odds-on to become the new boss of Volkswagen.

11.56am BST

Volkswagen could begin firing staff tomorrow over the emissions scandal, Reuters reports.

An internal investigation is underway to find who was responsible for programming VW diesel cars to emit lower levels of nitrogen oxides.

Top managers could also be replaced, even if they did not know about the deception, with U.S. chief Michael Horn and group sales chief Christian Klingler seen as potentially vulnerable.

11.45am BST

Germany's transport minister, Alexander Dobrindt, has confirmed that Volkswagen vehicles containing software to evade emissions testing were sold across Europe, not jus in the US.

He told reporters in Berlin that:

"VW told us that in Europe too, vehicles with 1.6 and 2 litre diesel engines are affected by the manipulation."

German paper @welt reports German transport minister saying #Volkswagen emissions scandal also affects European cars http://t.co/d1sytp6cik

11.37am BST

Germany's stock market has hit its lowest level since late August, dragged down by reports that some BMW cars have failed emissions tests (details here).

#DAX smashes thorough 9500 for first time since Black Monday as #BMW -8.5%, #Daimler -4%, #Continental -4.7% pic.twitter.com/ZJQnrDCGSW

11.19am BST

Emmanuel Macron, the French economy minister, has said there is no evidence that the big French car makers - Renault and Peugeot - are guilty of fiddling their emissions tests.

"At the moment it seems to be restricted to VW, due to the pressure of the market and the pressure they put themselves under.

"We have to be careful that just because somebody lied we don't kill all the others. We have to be careful that we don't put at risk a lot of jobs because of the misbehaviour of one player."

11.03am BST

Volkswagen is facing a wave of legal claims from UK owners over the emissions scandal.

We believe it will be in the thousands - it's constant enquirers at the moment.

"We've received enquiries from the general public, wondering what they should do."

"If the Volkswagen scandal applies to cars in the UK then this has the potential to be one of the largest group action lawsuits this country has seen.

"Quite simply it could be the car manufacturer's Libor scandal.

Thursday's Daily Mail front page: UK drivers to sue VW for billions #tomorrowspaperstoday #bbcpapers pic.twitter.com/gx01M70dY7

10.34am BST

Unsurprisingly, Volkswagen's image among consumers has been dented by the emissions scandal.

Polling firm YouGov has found that the public's perception of the VW brand has slumped since last week:

Our Buzz score measures whether a respondent has heard anything positive or negative about a brand in the last two weeks.

A dramatic drop in Buzz score is present in both markets. In the US, there has been a drop of ten points from +10 to 0. In the UK, VW has seen a decline from +5 to -3 in the last few days. It is now the lowest ranked car brand in the UK in terms of Buzz (out of 34). This is a fall of 31 places in a week.

10.25am BST

BMW's share price was hit this morning because a German car magazine is reporting that some of its diesel cars were found to exceed emissions standards.

BMW has denied using the 'defeat devices' used by VW to cut emissions during a test.

Now BMW's stock is falling because of this: http://t.co/puZq29XMbd pic.twitter.com/r8PNY4USsH

10.21am BST

More details about exactly who at VW was involved in the scandal could come tomorrow:

RTRS Reporting That VW Will Begin Announcing Names Of People Involved In Emissions Scandal From Friday Onwards

10.09am BST

BMW's share price is swerving around today, dropping 4% at one stage to become the biggest faller on the DAX.

They had been 3% higher in early trading, in what the FT calls "a very skittish mood".

Another volatile day for autos - BMW up, then down then up again on reports it's being dragged in to emissions story pic.twitter.com/LRFYCw6olt

BMW shares take a sudden tumble http://t.co/IWrMg2mLdj

9.54am BST

The Volkswagen diesel emissions scandal could be as serious as BP's Gulf of Mexico oil disaster, warns professor Baback Yazdani, dean of Nottingham Business School.

Professor Yazdani, a former director of Product Development Operations at Jaguar Land Rover, believes the financial consequences could be immense:

"This could be an unprecedented loss for VW, which became the world's largest automaker this year.

This may be at the same scale as BP's Gulf of Mexico disaster, or worse, proving that responsible management and leadership is of prime importance to all companies.

9.20am BST

VW shares are continuing to climb this morning, and are now up almost 7% at a119.

Clairinvest fund manager Ion-Marc Valahu says investors in Frankfurt are welcoming the departure of Martin Winterkorn.

"They've kicked out the CEO. The company and its shares should be able to stabilise."

9.06am BST

Documents seen by the Guardian show that Europe's three largest countries have been pushing regulators for less rigorous testing on carbon dioxide emissions.

France, Germany and the UK all wanted loopholes that would have allowed cars to emit more CO2 than legally permitted -- pushing up greenhouse gas emissions and fuel bills.

Exclusive: UK, France and Germany lobbied for flawed car emissions tests, documents reveal http://t.co/gB378AYQ5B

8.42am BST

Shares in Japanese carmakers fell today, on fears that they could be hit by the emissions scandal.

8.30am BST

It has emerged overnight that Volkswagen told customers in California five months ago that their emissions software needed upgrading.

Reuters has the story:

In April of 2015, Volkswagen of America sent letters to California owners of diesel-powered Audis and Volkswagens informing them of an "emissions service action" affecting the vehicles.

Owners were told they would need to take their cars to a dealer for new software to ensure tailpipe emissions were "optimised and operating efficiently."

8.20am BST

The Volkswagen crisis has shown that corporate governance at the carmaker failed badly, and other company bosses must be worried.

Nick Anderson of Henderson Global Investors tells Bloomberg TV:

Every CEO in Europe must be thinking about the culture in their business, and their whistle-blowing policy.

8.15am BST

Shares in Volkswagen have risen around 3.5% at the start of trading in Frankfurt, as investors continue to welcome Winterkorn's departure.

They're still down around 25% since the scandal broke, though.

Volkswagen shares trade 3.5% higher after open despite or b/c several broker downgrades. pic.twitter.com/esiovQ1wGj

8.08am BST

Martin Winterkorn is walking away from Volkswagen with a massive pension pot worth over a28m.

And as he stepped down, rather than being fired, he could also collect two years pay despite the emissions scandal.

After Winterkorn disclosed Wednesday that he had asked the board to terminate his role, company spokesman Claus-Peter Tiemann declined to comment on how much money the departing CEO stands to get. Volkswagen's most recent annual report outlines how Winterkorn, its leader since 2007, could theoretically collect two significant payouts.

Winterkorn's pension had a value of a28.6m at the end of last year, according to the report, which doesn't describe any conditions that would lead the company to withhold it. And under certain circumstances, he also can collect severance equal to two years of "remuneration."

Martin Winterkorn likely to leave #Volkswagen with a28.6 million ($32 million) pension http://t.co/1MKPa3qhrO pic.twitter.com/e2nh8ihwhP

8.00am BST

The Volkswagen scandal could even hurt growth across Europe, if other carmakers are drawn in.

Rabobank strategist Jane Foley believes it could even hurt the value of the euro - if investors are scared away from Europe.

We don't know that other carmakers aren't going to be drawn into this scandal, we need to see how this develops.

It has the potential to spread. If it does, it certainly could affect European growth, and then the euro too.

7.51am BST

The Volkswagen scandal could become the biggest threat to German economic growth, if consumers lose faith in its cars.

ING chief economist Carsten Brzeski argues that the whole country could suffer:

"All of a sudden, Volkswagen has become a bigger downside risk for the German economy than the Greek debt crisis."

"If Volkswagen's sales were to plunge in North America in the coming months, this would not only have an impact on the company, but on the German economy as a whole."

The German economy has defied Greece, Eurozone stagnation and China, but can it also stomach a possible fall in VW sales?

7.33am BST

Good morning.

"Germany's entire auto industry is at stake here. And when it's at stake, almost everything's at stake."

Guardian front page, Thursday 24 September 2015: Scandal claims VW chief as lawyers circle pic.twitter.com/jYMQqIPc5X

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