Volkswagen Dieselgate update: owners opt for buybacks, not fixes & is a 3.0-liter fix coming?

September 2, 2016

Volkswagen has had another lousy week due to the ongoing Dieselgate scandal. Admittedly, there were a few bright spots thanks to Audi and Porsche, but those have been overshadowed by gloom and doom from the mass-market VW brand. Worst of all may be early data on the company's U.S. repair and buyback program for 2.0-liter diesels.

1. Owners not interested in having their diesels fixed: In June, Volkswagen finally took the wraps off its plan to make things right for 475,000 American Audi and VW diesel owners whose cars were equipped with illegal defeat devices to help them cheat on emissions tests. Of the plan's $15.4 billion budget, just over $10 billion was earmarked for (a) compensating owners for lying about the cars' emissions stats and (b) fixing the cars or buying them back, whichever owners preferred. Among more than 210,000 owners who've already registered to participate in the plan, most are opting for the buyback option. (And for anyone who's wondering, no, Volkswagen can't resell those cars on the cheap until it fixes them.)

2. Fix for 3.0-liter Audi, Porsche, VW diesels coming soon? All may be going well for U.S. owners of Audi and VW 2.0-liter "clean diesels", but what about owners of Audi, Porsche, and VW 3.0-liter models? Plans to repair those vehicles have been shot down not once, but twice. However, Audi's global sales chief, Dietmar Voggenreiter, says that negotiations with the feds are going well, and that he's hopeful a technical solution will be approved by October. To us, that sounds like the plan might mirror the one for 2.0-liter vehicles, with an option for owners to fix or sell back their vehicles. Stay tuned.

3. Audi sales hit record levels, VW slides even further: Audi remained untouched by the taint of Dieselgate, with August sales up 2.5 percent, and year-to-date sales up 3.5 percent. Porsche was up for August and the year, too, at 3.5 and 2.6, respectively. However, VW seems to be stuck in a never-ending game of sales limbo, chanting refrains of "how low can we go?". The mass-market brand's U.S. sales tumbled by 9.1 percent in August, and its year-to-date numbers were 13 percent below 2015. 

4. VW offering fire-sale prices and new models to win back customers: VW's troubles in the U.S. began long, long before Dieselgate, but the company is working hard to ensure that the scandal isn't a nail in VW's U.S. coffin. The brand has promised dealers that it's slashing prices and offering a wider range of models to woo skeptical American consumers.

5. ...but how long until those new models appear? Many of the new models that Volkswagen wants to offer across its family of brands are electrics. Unfortunately, the company hasn't always looked kindly on EVs, and it lags behind some other automakers on the electrification front. Dieselgate has only worsened the problem by taking billions of dollars that might've been spent on development and using them for fixing cars and compensating owners. Don't expect to see serious changes to the company's lineup until 2020 or later. (Though CEO Matthias Muller has a slightly more optimistic view.)

6. Volkswagen opts not to sue South Korea after all: South Korea has been more critical of Volkswagen than many countries affected by the Dieselgate scandal. In July, the country slapped the company with a fine and ordered that Volkswagen stop selling all Audi and VW models until further notice. Volkswagen considered suing the South Korean government, but now it's just going to try to bring its vehicles up to code. Translation: discretion is the better part of valor.

7. ...but further south, Australia is suing Volkswagen: The government's Competition and Consumer Commission is suing Volkswagen for selling 57,000 vehicles that contain software designed to help cars cheat on emissions tests.

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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