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Emissions scandal could damage VW and Audi credibility - and RVs

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Volkswagen and Audi dealers are being warned the brands could face a “major credibility crisis” in the UK following revelations the Volkswagen Group deliberately "fixed" emissions software fitted to some of its vehicles in the US, says Glass's.

Residual values could also fall.

The scandal means that models including the Audi A3, Volkswagen Jetta, Beetle, Golf and Passat were all fitted with software that was deliberately designed to cheat US emissions tests. South Korean officials say they are going to look into three diesel models, the VW Jetta and Golf and Audi A3.

Rupert Pontin,Glass's head of valuations, said: "Our understanding is that VW have admitted that the accusations made against them are true, although we don't yet know whether similar ‘fixes' affect UK models.

"Whatever the final truth, this is potentially very damaging for the Audi and Volkswagen brands.

"Essentially, the company has deliberately set out to mislead legislators and customers.

"If you are a fleet or private motorist who has chosen a VW or Audi, with the emissions performance of that vehicle being a major benefit, then you are going to feel cheated. No question.

"Exactly how this plays out is very difficult to predict but it could affect the used values of Audis and VWs. These are brands built on decades of credibility and that credibility has been badly damaged."

Rupert added that it did not help that Volkswagens and Audis had, in the view of Glass's, started to reach a saturation point in the UK market in recent years.

"Our view has been for a while that Volkswagen sells too many cars for a semi-prestige brand and Audi too many for a prestige one.

“The volumes are large enough that they are creating downward pressure on RVs.

"The emissions scandal is obviously not going to help this situation. If buyers lose trust in the brands, then there is inevitably less demand and values suffer."

It has been suggested other brands in other countries could also be implicated in the emissions' rigging scandal.

The Guardian today quotes a US official.  

“We need to ask the question, is this happening in other countries and is this happening at other manufacturers?

“Some part of our reaction is not even understanding what has happened exactly,” said John German, one of the two co-leads on the US team of the International Council for Clean Transportation (ICCT), the European-based NGO that raised the alarm.

Regulations affecting diesel cars in the US are much stricter in the US and they represent just 3% of the new car market.

However, half of all new cars sold in the UK are diesel, with the company car market favouring the fuel.

 

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Comments

  • Andy Greg - 22/09/2015 14:33

    Since when did anyone go into a dealership and buy a car based on its emissions. To most people its just Double Dutch. Stop scare mongering AM online, oh and by the way you are rather late with this news. Most people know that the US emissions are nonsense and when you actually go there you'll see that they have no MOT tests and loads of people are running around in old vehicles that in Germany and the rest of Europe would have been taken off the roads years ago,

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    • Iceage - 22/09/2015 18:14

      Think you may be missing the point a little here Andy? The value of this company has dropped this week by Ten Thousand Million Euro!!!.... These boys are in SERIOUSLY Deep DoDo

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    • Iceage - 22/09/2015 18:19

      Think you may be missing the point here a little? The value of the company has dropped this week by Ten Thousand Million Euro!!!! These boys are in SERIOUSLY deep dodo

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  • Kel Prince - 22/09/2015 14:56

    It is impossible not to accept that the Volkswagen news is a disaster but it happened in The United States and there is no justification for the national press, liberally using inverted commas, to suggest that vehicles in the UK, subject to an entirely different testing regime, are in any way involved

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  • Weave - 22/09/2015 15:13

    Andy Greg may have a point re walking into a showroom and buying a car based on emissions? But for sure, company car users take account of emissions because it affects their benefit in kind / tax liability? Will this affect anyone? Not sure at the moment but if it does.....watch out ! I guess it may depend on how our tax man views the potential issue? Ultimately one could foresee other manufacturers (assuming they are innocent) suing VW as it would be likely they would have missed out on sales VW in effect stole from them by lying about emission data? I suspect it is a whole lot more complicated than just these questions too! For sure though, VW still make good cars. Maybe there will soon be some bargains to be had? If there is, demand will rise and any price falls will be slowed and maybe even reversed back towards where they started! Might be a good time to buy VW shares?

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  • Steve - 22/09/2015 16:54

    Could other manufactures be doing the same? Has the question been asked??

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