Volkswagen scandal – seven days that rocked the German carmaker

In just a week the VW emissions scandal has wiped a third of the carmaker’s value and become a bigger threat to the German economy than the Greek debt crisis

Friday 18 September

Volkswagen is told to recall 482,000 cars in the US after it is caught deploying sophisticated software to cheat emissions tests and allow its cars to produce up to 40 times more pollution than allowed. The Environment Protection Agency claims VW installed defeat devices, meaning the cars only cut their nitrogen oxide (NOx) pollution during certification tests. Its investigation was prompted by research by the International Council on Clean Technology (ICCT), which had finally forced VW to admit its actions.

The EPA says: “We intend to hold Volkswagen responsible. We expected better from VW. Using a defeat device in cars to evade clean-air standards is illegal and a threat to public health.” The agency warns that VW will be further investigated and could face other action for breaching the Clean Air Act, including a maximum fine of up to $37,500 per vehicle, or $18bn (£11.8bn).

Sunday 20 September

VW starts showing some contrition, promising to launch an investigation of its own. Chief executive Martin Winterkorn says: “I personally am deeply sorry that we have broken the trust of our customers and the public. We do not and will not tolerate violations of any kind of our internal rules or of the law.”

Monday 21 September

The noxious stench of faked emissions tests spreads to Europe – and the Frankfurt stock exchange.

Within minutes of the market opening on Monday morning, about €15bn (£11bn) is wiped off VW’s share price. The German government warns that the VW scandal is jeopardising the reputation of Germany’s entire automotive industry.

Concerns also grow about the extent of possible test-fixing, with campaigners claiming that the European testing system is not fit for purpose. The possible ramifications for car manufacturers – and public health – start to emerge as the ICCT warns that other vehicles are emitting far more NOx than official tests suggest.

VW presses ahead with a glitzy product launch in New York that features Lenny Kravitz singing – and an accompanying appearance on stage from US chief executive Michael Horn, who declares: “We have totally screwed up.”

Tuesday 22 September

The morning after the party, the headache grows. Volkswagen now admits there are 11m cars worldwide fitted with its defeat devices. The numbers could mean that VW’s diesels have pumped out as much as 900,000 tonnes of extra NOx emissions a year – about 25 times more than the UK’s controversial Drax power station – with huge implications for public health.

Winterkorn apologises again, releasing a hastily filmed video saying he was “endlessly sorry”. However, he insists he will not resign, even though VW shares slump again and the group tells investors it is earmarking €6.5bn to deal with the fallout.

Governments around Europe call for action: Germany’s chancellor, Angela Merkel, demands “complete transparency” and sends a transport ministry team into the firm’s Wolfsburg HQ. Britain and France call for an EU commission inquiry.

Analysts start talking about a “Libor moment” for the motor industry, and speculate on the uncertain future of diesel cars.

Shares in other carmakers slip: Peugeot is down 7%, with BMW and Daimler, the owner of Mercedes-Benz, having 5% wiped off their value.

Wednesday 23 September

Volkswagen chief executive Martin Winterkorn resigns, taking responsibility for the German carmaker’s rigging of US emissions tests.

Winterkorn finally bows to the inevitable and falls on his sword, protesting he was “not aware of any wrongdoing on my part”. He walks away with a €28m pension pot.

Lawyers start to circle: several class-action lawsuits are filed in the US and Canada, with UK firms saying they are preparing for similar cases here on behalf of VW owners. Criminal investigations are launched by the US Justice Department, while German public prosecutors consider the merits of a case. VW establishes a special committee to investigate, warning that heads will roll.

Rival carmakers insist that VW is an isolated case. But criticism deepens over how much governments knew, and when, about true NOx emissions from diesel engines compared with test results in the motor industry.

It also emerges that Germany was aware of defeat devices and that Britain, France and Germany had lobbied to dilute proposed real-world emissions tests for diesel engines, now delayed until at least 2017.

Thursday 24 September

Germany confirms that VW vehicles with software installed to cheat emissions tests were sold across Europe.

Top German economists warn that the VW scandal could jeopardise the country’s growth, and could now be a bigger problem for the wider German economy than Greece’s debt.

BMW shares take a further hit after transport campaigners claim their diesels also far exceed emissions limits in real-world tests.

Under pressure from environmental groups and a prospective parliamentary grilling, the UK’s Department for Transport says it will start its own inquiry into car emissions, including running new lab tests and comparing the results with cars on the road. France and Italy also announce action including random checks.

Friday 25 September

Volkswagen name Matthias Müller, the head of the group’s Porsche unit, as the new chief executive.

Volkswagen unveils its new boss, Matthias Müller, formerly head of its Porsche division. The carmaker then blames the emissions scandal on a “small group” of people and says a small number of unnamed staff have been suspended.

Rival car manufacturers angrily rebut claims they they employed similar methods, the EPA promises to “up its game” on the testing of cars, and the UK government insists it had not been given enough information to act on misleading test results.


Gwyn Topham Transport correspondent

The GuardianTramp

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