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DIESEL SCANDAL

Toyota Reigns Supreme Four Years Running

January 27, 2016 by admin 1 Comment

Volkswagen’s quest to overtake Toyota will have to wait at least another year as the German automaker deals with more than 11 million recalled models.

2016 Toyota Prius
The Prius is just one of many models powering Toyota to world leadership.

Once again, Toyota Motors is the largest producer of passenger and commercial vehicles in the world, edging out the Volkswagen Group and the General Motors Company for that honor reports Automotive News.

At the beginning of the year, it appeared Toyota’s three-year run was in jeopardy as a rapidly expanding Volkswagen seemed to have the momentum to overtake Toyota. But then something else intervened, namely a diesel engine scandal.

That scandal revealed that the German automotive giant had fudged data regarding its “clean diesel” engines, with the California Air Resources Board and the federal Environmental Protection Agency uncovering the truth. Volkswagen’s quest to overtake Toyota was doomed and three years ahead of schedule.

The scandal was brought to light in mid-September, effectively putting a stop to new diesel-powered vehicle sales for the Volkswagen, Audi, and Porsche brands. Those sales, accounting for more than 25 percent of the Volkswagen brand’s US total, assured Toyota its place on top would continue.

In 2015, Toyota sold 10.15 million new vehicles worldwide, falling 0.8 percent over 2014. Toyota counts sales from its subsidiaries, Daihatsu Motors and Hino Motors, in its figure.

Volkswagen sales fell by 2 percent with the automaker moving approximately 9.9 million vehicles. In third place was General Motors, whose seven-plus decade reign as the world’s top automotive producer ended in 2008 when Toyota moved past GM.

In 2011, GM overtook Toyota for one year as the Japanese automaker recovered from a devastating earthquake and tsunami that shook its home country. Last year, GM sales rose slightly by 0.2 percent, finishing just above 9.8 million units.

If Toyota maintains its position for a fifth consecutive year it may be due in part to buying out the 49 percent share of Daihatsu it doesn’t already own, a company with a strong presence in Indonesia and Malaysia.

Toyota also has the next-generation Prius to show for it, but with fuel prices continuing to fall, demand for hybrids is tumbling with it. Nevertheless, Prius is the cornerstone of Toyota’s green efforts, with more than a dozen other hybrid models sold under the Toyota and Lexus marques. Toyota is also introducing its first production fuel cell model, the hydrogen-powered Mirai.

Globally, the world’s automakers produced 89.5 million vehicles in 2014 according to the International Organization of Motor Vehicle Manufacturers; 2015 data is not yet final. Sales in 2014 rose by 3 percent over 2013, but were up 34 percent since 2005. The global auto industry has a rising consumer class to thank for the increased sales, although economic headwinds may show an even smaller increase for 2015.

Boasting about sales may seem counter productive and lead to the same types of cheating Volkswagen is now known for. At the same time manufacturers with strong sales can also point to economies of scale and the attendant savings that come with spreading overhead across more vehicles sold.

See Also — About the 2017 Honda Clarity Fuel Cell Sedan

Filed Under: Automotive News Tagged With: DIESEL SCANDAL, GLOBAL AUTO SALES, GM, TOYOTA MOTORS, Toyota Prius, VOLKSWAGEN GROUP

US Congress to Interrogate Volkswagen CEO Today

October 8, 2015 by admin Leave a Comment

Among the perks of a senior executive are a generous salary, excellent benefits, and stock options. Typically, these are the advantages the rest of us focus on when we consider the awe-inspiring lives of CEOs.

But there is one aspect of the job that drives home why these individuals are so handsomely compensated: when things go wrong, they become the very public face of the company, as neither internal marketing nor external public relations can answer the questions lawmakers insist are answered. Behind the scenes stands the board of directors who will quickly learn if their chosen executive can withstand a withering confrontation.

U.S. Capitol Building
The US Capitol Building in Washington, DC.

The legislative focus today is on Volkswagen Group of America President and CEO Michael Horn, the German-born director whose time for scrutiny has come. In particular, Horn will testify under oath before the House Energy and Commerce Committee to explain why so-called “defeat devices” were installed in select 2009 to 2015 model year diesel-powered cars in a bid to circumvent EPA regulations.

Such regulations require manufacturers to certify that diesel engines release no higher than a certain threshold of particulates. An independent investigation of VW’s 2.0-liter, turbo-diesel engine — found in five Volkswagen brand products and in one Audi model — spew 10 to 40 times the legal limit. Not only was this practice deceptive and illegal, but it is harmful and can sicken, perhaps kill people with respiratory problems.

Volkswagen has had nearly three weeks to prepare for the inevitable hearing before the congressional oversight panel to answer questions. Lawmakers, acting on behalf of the American people, will ask Horn why the defeat devices were installed, how the decision to install them was made, and why the scandal went undetected for so long. Officials from the EPA will also have their chance to grill Horn today.

The German automaker — the world’s largest in terms of volume for the first half of 2015 — has a disproportionately small slice of the US market. Indeed, its top competitors, GM and Toyota, are domestic leaders and sell far more cars than the Volkswagen Group. Brands such as Kia and Subaru easily outsell the Volkswagen brand alone. The new line of diesels, introduced in 2009, were expected to play a big part in delivering Volkswagen from relative obscurity. Although sales have yet to spell a significant difference, the diesel crisis has cast a shadow over the entire US operation.

Though the initial scandal revealed 482,000 affected vehicles in the US, Volkswagen management quickly followed the revelation with an announcement that nearly 11 million vehicles are impacted worldwide. Volkswagen has also set aside $US 7.2 billion to cover the anticipated cost of addressing the emissions scandal. Those funds, however, won’t come to close to covering fines that potentially could approach $18 billion in the US alone.

Despite its global size, Volkswagen’s political capital in America is small. An AP “big story” focusing on Volkswagen’s clout revealed that it invests only a fraction of what GM, Toyota and Ford spend to curry the favor of lawmakers. All three automakers contribute funds commensurate with their US footprint. For example, Toyota has 10 manufacturing plants in America and Volkswagen has just one.

Besides today’s congressional and regulatory grilling, other action is certain to follow, including administrative, civil, and criminal prosecution. Fraud charges and money laundering investigations will be conducted.

Some states, such as California, have already begun proceedings. And the usual attorney pools are working with the affected owners to protect their rights. Unlike the typical recall where a safety issue looms large, Volkswagen owners do not have that concern. Still, Volkswagen must offer a fix, compensation or a buy back plan, details that might emerge during today’s proceedings.

Related Volkswagen Stories

Diesel Resurrection: How Volkswagen Might Win Back Customers

Volkswagen Scandal No Surprise to Those Who Have Been Tracking It…VW Management Included

Volkswagen Diesel Cheating May Cost the Company Billions

US Capitol Building photo copyright Auto Trends Magazine. All rights reserved.

Filed Under: Automotive News Tagged With: AUDI, CEO, CONGRESS, DIESEL SCANDAL, EPA, INTERROGATION, MICHAEL HORN, US Capitol, Volkswagen

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