Volkswagen Dieselgate update: Troubles worsen abroad, but VW execs finally wise up

August 4, 2016

Volkswagen continues its efforts to leave the global Dieselgate scandal behind. Will the company's long, slow slog turn into a death march, or will it end in a victory parade? Check out these recent headlines, and judge for yourselves:

1. VW sales sink even further, but other brands keep rising: No one will be surprised to learn that VW's U.S. sales stats fell even further in July. The brand sold just 28,758 vehicles here last month, 8.1 percent fewer than July of 2015. Year-to-date sales totaled 177,772, off 13.6 percent. However, Audi remains untouched by the whiff of scandal: its sales for the year edged up 3.6 percent, reaching 115,298. That kind of performance--combined with strong sales from Porsche and Skoda--added up to 5.116 million vehicle deliveries worldwide in the first half of 2016. That put Volkswagen ahead of its nearest rival, Toyota, which delivered 4.992 million vehicles between January 1 and June 30.

2. South Korea and Bavaria retaliate: As expected, South Korea said that it will block the sale of some 80 Audi, Bentley, and VW models because Volkswagen lied about their emissions and noise-level stats. The ban affects roughly 83,000 vehicles in the country. South Korea will also fine the company 17.8 billion won ($16 million) for its test-related fibs. 

Meanwhile in Germany, the Bavarian government plans to sue Volkswagen for up to 700,000 euros ($779,541) due to stock losses that have affected pension funds. That's bad news for the company, but chump change compared to the billions of dollars in fines and other expenses Volkswagen is shelling out elsewhere.

3. VW execs wise up, let U.S. pick its own SUV name: We've all heard the old chestnut about the Chevrolet Nova not selling well in Mexico because "nova" is similar to "no va" in Spanish, which means "doesn't go". That story, unfortunately, is complete bunk, but it's true that names are important, and what works well in one country may not work in another.

VW usually lets a German team name its U.S. products, but since "Tiguan" and "Touareg" never really slid off American tongues (or flew off American lots), the micromanaging higher-ups are finally giving their U.S. co-workers a chance to name VWs new SUV. Word on the street is, the name won't even start with a "T". Would this have happened without Dieselgate battering U.S. sales and forcing changes in leadership? Don't bet on it.

4. VW has plans for three electric car platforms and more SUVs: The company that insisted its "clean diesel" vehicles could be as eco-friendly as EVs may have finally turned a page. Though we'll believe it when we see it.

5. Mazda and General Motors are still working on diesels: If you thought that Dieselgate would kill the world's appetite for diesels, think again. Mazda, which has been reluctant to explore electric cars or even hybrids, says that it still plans to sell a diesel in the U.S. Unfortunately, it's running up against the same problem Volkswagen did: a patchwork of emissions standards that can force automakers to compromise performance. No word on when Mazda's diesel will arrive, but GM plans to sell a diesel version of the Chevrolet Cruze in 2017.

6. Mercedes-Benz diesels on hold: The German luxury brand says that diesel versions of its C-Class and GLC-Class vehicles have been delayed due to more stringent testing in the wake of Dieselgate. The company hoped to launch them in the U.S. during the first quarter of 2016, but now their arrival isn't expected until mid-2017--or later.

7. Defeat devices are common in Europe: If you have time for a quick history lesson, this piece about defeat devices is worth a read. The TL;DR version is: European laws give automakers free reign to turn off emissions controls if doing so will help a vehicle run better and longer.

Note: For purposes of clarity, "Volkswagen" has been used to refer to the Volkswagen Group parent company, while "VW" has been used to refer to the company's popular mass-market brand of automobiles.

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