The Telegraph
Thursday , November 5 , 2015
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Notice to Volkswagen India

- Emission query on five diesel models

New Delhi, Nov. 4: German carmaker Volkswagen's troubles appeared to deepen today after it admitted that it had understated emissions of carbon dioxide, a greenhouse gas, in about 80,000 vehicles sold in Europe - for the first time bringing its petrol-driven vehicles within the ambit of an ever-widening scandal that erupted in September.

The latest revelations add a new dimension to a crisis that previously focused on the carmaker's attempts to cheat on smog-causing nitrogen oxide emissions by installing deceptive software in 11 million diesel vehicles worldwide.

In a related development, the Narendra Modi government said it had decided to issue a show-cause notice to Volkswagen India after tests showed a significant variation between on-road emission levels and readings thrown up during vehicle certification tests in the laboratory.

Emission variations in India have been found in the diesel models of Jetta, Vento, Skoda Octavia, Audi A4 and A6. Jetta and Vento are Volkswagen brands. Skoda is a wholly-owned subsidiary of Volkswagen while Audi is a Volkswagen group company.

Pune-based Automotive Research Association of India (ARAI) - a vehicle certification agency - had carried out the tests.

"We will give them 15 to 21 days to reply to the notice that we will be sending out today. We are expecting a reply from them by the month-end," said Ambuj Sharma, additional secretary in the ministry of heavy industries.

"Volkswagen Group India will continue to fully cooperate with the Government of India in this matter," a company spokesperson said.

Snowballing crisis

Wolfsburg-based Volkswagen AG has already set aside euros 6.7 billion ($7.2 billion) to address its emission crisis. But the latest admission will force the troubled carmaker to incur another euros 2 billion ($2.2 billion) in fresh financial penalties because of tax breaks that Europe had granted on cars with low carbon dioxide emissions.

Shares of Volkswagen plunged 8.9 per cent and wiped put another euros 3 billion ($3.3 billion) off its market value.

In a statement yesterday, Matthias Muller, Volkswagen's chief executive, said the company "deeply regretted" its false claims about the carbon dioxide emissions. He added that Volkswagen's public statements about the problem should demonstrate that the company was determined to conduct a thorough inquiry. "It's a painful process, but there is no alternative," he said.

Volkswagen said the latest disclosure was most likely not a software issue. An official with the Environmental Protection Agency (EPA) in the United States said the agency was still studying the Volkswagen statement.

Most of the cars with the carbon dioxide problem are equipped with an engine line known as the EA 288, of which there are 1.4-litre, 1.6-litre and 2-litre versions. A small number of cars with gasoline engines are also affected.

Volkswagen said it had made erroneous carbon dioxide and fuel-economy claims in Europe for cars beginning with the 2012 model years, as well as the 2015 and 2016 models currently on sale. The affected cars are the Volkswagen Polo, Golf and Passat and the Audi A1 and A3. Some SEAT and Skoda cars are also involved.

Tuesday's disclosure came a day after the EPA levelled new allegations. The EPA said it found defeat devices on 3-litre diesel engines used in larger sport-utility vehicles from Volkswagen such as Touraeg, Porsche Cayenne, Audi Q5 and Q7 SUVs and Audi A6 and A8 sedans. The agency said the vehicles it tested had nitrogen-oxide emissions up to nine times the allowable standard.

Volkswagen disputed the EPA's claims, saying it didn't install any emissions-cheating software on the engines used in these vehicles.

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