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Volkswagen feuds with thriving stablemate Skoda

BERLIN, Oct 4 (Reuters) - Volkswagen managers and unions are seeking to curb competition from lower-cost stablemate Skoda, move some of its production to Germany and make the Czech brand pay more for shared technology, company sources told Reuters. As VW struggles to cut jobs and spending at German factories and turn the page on dieselgate, Skoda's superior car reviews and profitability have intensified the brands' rivalry within the Volkswagen empire. VW now wants to reduce what it sees as Skoda's unfair advantages - combining German technology with cheaper labor - and reaffirm the top-selling brand's primacy ahead of a wave of new electric car launches, the sources said. The tussle between VW and Skoda is reviving tensions at the heart of the Volkswagen group between profits and jobs, and between central control and autonomy for its 12 vehicle brands. "Instead of devoting our efforts to beating Tesla, we may just be setting up a futile internal conflict," said one manager. Once the butt of jokes, Skoda has blossomed under 26 years of VW group ownership into a successful mid-market carmaker, steadily winning business from rivals - including VW - and surpassing even Audi's operating profit margin last year. At the same time, VW is facing thousands of job cuts as management moves to trim excess capacity at German factories. Its powerful domestic unions see Skoda's success as both a threat and a potential lifeline. VW workers' representatives are now demanding the transfer of some Skoda production to their underused German plants, a source close to the supervisory board told Reuters. The proposal aims to offset declining output of the VW Passat and aging Golf that could otherwise threaten more jobs. They are also making the case that Skoda should pay higher royalties to use VW's main common vehicle platform. The so-called MQB architecture also underpins mid-sized models from the group's Audi and SEAT brands. Responding to the news, Czech Prime Minister Bohuslav Sobotka said he would meet Skoda management and unions to ask for clarification. The government will seek to ensure that VW investment plans are followed through and that "production is not moved outside the country," a statement released by Sobotka's office said. Skoda's main union warned that a production shift could cost as many as 2,000 jobs. VW's works council declined to comment.

VW, Fiat, Mercedes could be CNG winners in Europe

Fiat ads in the US try to play up the exotic, sexy side of Italian culture. On the home front in Italy, however, passenger-vehicle sales are marked by something less edgy and quite a bit more practical: the growth of compressed-natural-gas (CNG) powered car sales. In fact, Italy is leading a group of European countries where CNG sales are on the upswing and may be benefiting automakers like VW, Fiat and Mercedes-Benz, according to Automotive News. VW started sales of its Golf TGI natural-gas vehicle this year – the company's fourth in Europe – while Mercedes-Benz added a natural-gas B-class model. Fiat accounts for about 50 percent of CNG vehicles sold on the continent. In all, Europe's CNG sales through September totaled about 67,000, up seven percent from a year earlier, Automotive News Europe says, citing research firm JATO Dynamics. And the number of CNG vehicles on Europe's roads could jump tenfold within the next decade. The draw is a combination of lower refueling prices and a CNG drivetrain that typically emits less CO2 than diesel vehicles. As for Italy, about five percent of new-vehicle sales are CNG. To put that into perspective, hybrids, battery-electric vehicles, plug-in hybrids and diesels combined to account for about 4.2 percent of US vehicle sales last year. News Source: Automotive News - sub. req.Image Credit: Volkswagen Green Fiat Mercedes-Benz Volkswagen Natural Gas Vehicles CNG

Volkswagen pushed back against Takata airbag recall

Volkswagen and Audi will recall about 850,000 vehicles in the US to replace their Takata-supplied driver side airbag inflators, but the automaker doesn't believe the safety campaign is entirely necessary. In a letter to the National Highway Traffic Safety Administration, the company pushes the agency to re-evaluate the recall's scope because the parts are allegedly safe, it claims. VW asserted in the letter, which NHTSA posted online (as a PDF) with other documents about the company's safety campaign, that the vast majority of the automaker's recalled vehicles used Takata inflators from the supplier's factory in Freiburg, Germany. Only the US-built Passat had components from Takata's plant in Mexico. VW's argues to NHTSA that its recall is unnecessary because there are no reported airbag ruptures in the German-made parts, and the plant has better quality control than Takata's factories in the US and Mexico. In addition, the Mexico-manufactured components in the Passat are also allegedly safe because they come from a time after significant upgrades to the plant to address humidity and welding concerns. "We do not believe the facts known to date support the scope as defined in the Takata defect notification," VW's letter says. To be clear, VW is not refusing the Takata recall and plans to fix the affected vehicles. Instead, this letter shows the automaker expressing an opinion that NHTSA's scope for the campaign is too broad. VW now plans to do its own analysis on the inflators to strengthen that case, according to The Detroit News. "We respectfully request that, should such results be shown, the agency work with Volkswagen and other manufacturers to revisit the scope of these recalls," the letter said. Takata's recalled inflators use ammonium nitrate as a propellant, and experts believe that long-term exposure to high humidity can make the chemical more likely to cause a rupture during airbag deployment. The spray of metal shrapnel from the exploding parts has links to at least 10 deaths. Related Video: