Business & Real Estate

Volkswagen won’t sell 2016 diesels amid pollution scandal

In this Sept. 21, 2015, photo, President and CEO of Volkswagen Group of America Michael Horn speaks at the Brooklyn Navy Yard in New York. Volkswagen’s top U.S.-based executive said he first learned in 2014 of emissions problems with the German automaker’s diesel cars.
In this Sept. 21, 2015, photo, President and CEO of Volkswagen Group of America Michael Horn speaks at the Brooklyn Navy Yard in New York. Volkswagen’s top U.S.-based executive said he first learned in 2014 of emissions problems with the German automaker’s diesel cars. The Associated Press

Crippled by a scandal over its tailpipe emissions, Volkswagen is scrapping plans to sell new diesel cars in the United States during the 2016 model year.

The German carmaker said Wednesday it has withdrawn its application to regulators to have its 2016 model-year diesels certified for sale in the United States. The model year starts this month.

The announcement was made in prepared remarks by Michael Horn, head of Volkswagen Group of America, for delivery before a congressional committee on Thursday.

Volkswagen’s withdrawal from the 2016 diesel market wasn’t surprising in light of the mammoth problems facing the company over its admission last month that it had equipped millions of cars with “defeat device” software that circumvented restrictions on tailpipe emissions. The software shut off certain emissions controls while cars are on the road, boosting fuel mileage but allowing the vehicles to spew up to 40 times the legal limit of nitrogen oxide (NOx) and other harmful pollutants.

Volkswagen hasn’t yet officially withdrawn its application to have its cars certified by the California Air Resources Board, said board spokesman David Clegern. Another spokesman, Stanley Young, said the board wouldn’t certify the new Volkswagen diesels “until we are convinced they meet all the requirements.”

Engineers at the board’s El Monte test lab were instrumental in establishing the existence of the rogue software.

Volkswagen’s newly installed chief executive in Germany, Matthias Mueller, told the newspaper Frankfurter Allgemeine Zeitung that recalls are likely to begin in January for the cars already on the road. The recall will likely take all year, he said. The U.S. Environmental Protection Agency and California air board have said certain Volkswagen and Audi diesels made since 2009 were equipped with the defeat device software.

Horn, the U.S. chief, said the company recently told the California air board and EPA that Volkswagen’s problems extend to the cars made for the just-begun 2016 model year. The cars’ “emissions control strategy” includes a software feature that would require approval from regulators before 2016 diesels can be sold. He didn’t go into detail other than to describe the feature as an “auxiliary emissions control device,” according to written remarks to be delivered to the House Energy and Commerce Committee’s oversight and investigations subcommittee.

“As a result, we have withdrawn the application for certification of our model year 2016 vehicles,” he said. “We are working with the agencies to continue the certification process.”

Horn also disclosed that he was told of “a possible emissions noncompliance” in the spring of 2014, when a study by researchers at West Virginia University revealed a problem with some emissions from diesel cars. The West Virginia study, performed in conjunction with engineers at the California agency’s El Monte lab, didn’t publicly identify which cars were performing poorly.

A prominent Sacramento car dealer, Rick Niello, said he expects Volkswagen to compensate his dealership and others for the 2016 cars that now can’t be sold. “We’ve been victimized as much as the public on these cars,” said Niello, president of Niello Co. of Sacramento, which owns Volkswagen and Audi dealerships. “I would expect Volkswagen to buy those cars back from us and take care of their obligations.”

Niello said he has only a handful of Volkswagen and Audi 2016 diesels on his lots anyway.

Len Brewster, a Detroit auto industry analyst, said Wednesday’s announcement is “probably the first of many shockers to come. They seem to be in full damage control mode, and if that’s the case, it’s going to cost them a lot of money, public concessions and a lot of apologies.”

Dale Kasler: 916-321-1066, @dakasler

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