VOLKSWAGEN EMISSION SCANDAL

SUBMITTED BY:

ALISHA SAMANTRAYJAGADEESH KUMAR

NISHA AGARWALPRABHJOT KAUR

ROSHEN CHARLESSUSHRITA MAHARANA

SHEETAL BHUDWARSATARUPA GANGULY

OVERVIEWThe company, which owns 70 percent of the U.S.

passenger-car diesel market, is in major trouble for

cheating on diesel-emissions tests. It's been dubbed the

"diesel dupe".

VOLKSWAGEN

•Established in 1946

•A German car manufacturer, headquartered in Wolfsburg,

Lower Saxony, Germany

•Top selling marquee of the Volkswagen group

INTRODUCTION

WHAT HAS VOLKSWAGEN DONE?

The company has falsified emissions data on its diesel vehicles, pretending

they were cleaner than they are.

HOW EXACTLY?

By installing a piece of software into computers on its cars that recognize

when the car is being tested – a so-called "defeat device". This fine-tunes

the engine’s performance to limit nitrogen oxide emissions. When used

on the road, the emissions levels shoot back up.

WHY VOLKSWAGEN CHEATED?

• The U.S. has tougher diesel emissions standards than Europe.

• To meet these steeper requirements means to reduce fuel efficiency and

performance.

• Tougher for VW to advertise their diesel cars against more typical

vehicles in U.S.

Why did the company use a manipulative software instead of tampering the machine which tested the pollution emissions?

As per the website of EPA (Environmental protection Agency) of the USA many

manufacturers has a pollution check facilities in their factory and a few among

the tested vehicles are selected randomly by the EPA to check the validity of the

tests and then certification is given to the entire lot.

If they had tampered the machine they would have been caught in the tests

conducted by the EPA.

How widespread is the problem?

•11m cars worldwide had the software installed; 1.2m of them were in the UK.

•Cars effected in the UK:

•Volkswagen passenger cars-508276

•Audi-393450

•SEAT-76773

•SKODA-131569

•Volkswagen commercial vehicles-79838

•Volkswagen stops sale of all Polo variants in India

•More than 300,000 Volkswagen cars under scrutiny in India

CONSEQUENCES OF THE SCANDAL

• Large fines

• Loss in customer trust

• Disenchantment

• Possible backlash from its investors.

• Maybe even criminal charges

• Decline of sales further in this year by over 20% approx $20 billion.

WHICH MODELS ARE INVOLVED? The allegations, which have been admitted by VW, cover the Jetta, Beetle, Audi A3 and Golf models from 2009 to 2015 and the Passat in 2014 and 2015. Audi, Seat and Skoda cars are also affected, as well as VW vans. Some diesel and petrol vehicles also have "irregularities" around carbon dioxide emissions.Models are:-Volkswagen Jetta 2.0L TDI Audi Q7 3.0L V-6 TDI Volkswagen Touareg 3.0L V-6 TDI Volkswagen Golf 2.0L TDI Audi A3 2.0L TDI Volkswagen Beetle 2.0L TDI Volkswagen Passat 2.0L TDI Porsche Cayenne Diesel 3.0L V-6 Audi A6 3.0L V-6 TDI Audi A7 3.0L V-6 TDI Audi A8/A8L 3.0L V-6 TDI Audi Q5 3.0L V-6 TDI

How Volkswagen affected Audi, Skoda and Seat?

• After the findings of EPA(Environmental Protection Agency) that

Volkswagen has manipulations in the software

• The diesel engine brands were first affected.

• The company confirmed that around 1.2 million customers were affected

in UK for the cause.

• 2.1 million complaints worldwide for SNEAKY SWITCH installed in Audi

and Volkswagen.

• Almost 1.42 Audi drivers affected in Europe along with Skoda 2.5 million

cars

EFFECT ON EXISTING CUSTOMERS

• CAR TAX-Drivers pay more tax due to emission of more carbon

dioxide.

• the fact drivers are paying more for fuel than they expected, extra repair

costs and a fall in the price for the vehicles.

• Audi model lines the A1, A3, A4, A5, A6, TT, Q3 and Q5 are affected.

CAN WE CLAIM??

• Lawyers have started writing to the organisation for settlement

schemes.

• Investigations have been started in Europe and UK.

WHAT HAPPENS NEXT?

•One-third of the company’s market cap has been wiped out with its nose-diving

stock price, and the company has abandoned its goal at becoming the world’s largest

automaker by 2018.

•The U.S. Department of Justice sued Volkswagen on behalf of the EPA, which can

technically fine Volkswagen up to $37,500 per car—a potential $18 billion punch.

• Internal audits inevitably will lead to firings, restructuring, and other corporate

changes.

•VW has offered to fix affected models and expects to start the recall in January

2016. It is facing investigations in over a dozen countries as well as lawsuits from

motorists.

EMISSION REGULATIONS

• Environmental Regulatory Agencies focus on four types of engine

emission:

i. Carbon monoxide

ii. Hydrocarbons

iii. Nitrogen oxides

iv. Particulate matter

What Is the Status of the Investigations?

Regulators across the globe are conducting investigations, as are attorneys general in all 50 states. The Justice Department on Jan. 4 filed a civil lawsuit against the company over the deception. VW also faces lawsuits

from owners seeking compensation for the decreased resale value of their cars.

What Is at Stake for the Company?

• Volkswagen AG lost almost a quarter of its market value after it admitted to cheating on U.S. air pollution tests for years.

• Volkswagen’s chief executive also stepped down and the company suspended several high-ranking executives.

• It also admitted that it had understated the output of carbon dioxide, a greenhouse gas, in about 800,000 vehicles, which could mean an additional $2.2 billion in costs and penalties.

•Volkswagen plunged as much as 23 percent to 125.40 euros in Frankfurt, wiping out about 15.6 billion Euros ($17.6 billion) in market value. The stock closed at 132.2 Euros.

•Sales of new Volkswagen-branded cars fell by 14% , Seat sales fell 25%, while Skoda’s were down 2.4%. Audi sales, however, increased 1.4%.

Technical Solutions • Volkswagen AG in Germany has submitted a technical solution for nitrous oxide

(NOx) emissions issue and it has been approved by the independent German

Federal Motor Transport Authority.

• The solution for 2.0 litre engines will involve a software update only and the

completion time will be around half an hour.

• The solution for the 1.6 litre engines involves a hardware update (a modified

engine air intake being fitted to the engine) and a software update which are

expected to take less than an hour

• The Volkswagen dealer network will ensure that the solution will be completed at

the owner’s convenience and with minimum disruption.

What’s Volkswagen doing for customers?

•As part of its “Customer Goodwill Package,” Volkswagen is handing out $1000 cash

to every owner of a VW TDI named in the EPA’s first violation notice (not the second

notice announced November 2).

•That means nearly 482,000 people can get a $500 prepaid Visa card to spend on

anything and another $500 cash card valid only at Volkswagen dealerships (to use

toward another car, service, or lots of VW hats).

• They also get free 24-hour roadside assistance for the next three years. Audi,

Porsche, and VW TDI owners who took delivery after November 8 are not eligible

(full rules here).

•Current owners of any VW model can get a $2000 cash rebate toward a new car.

• Dealers also have “discretionary” cash they can use to sweeten deals (and they’re

getting guaranteed kickbacks for some models).

THANK YOU.