1974 Volkswagen Thing ; Type 181 on 2040-cars

Auto blog

VW may move production because of Russia's cutoff of natural gas

Volkswagen AG is exploring ways to counter a shortage in natural gas, including shifting production around its network of global facilities, signaling how the energy crisis unleashed by Russia’s invasion of Ukraine threatens to upend EuropeÂ’s industrial landscape. Volkswagen, EuropeÂ’s biggest carmaker, said Thursday that reallocating some of its production was one of the options available in the medium term if gas shortages last much beyond this winter. The company has major factories in Germany, the Czech Republic and Slovakia, which are among European countries most reliant on Russian gas, as well as facilities in southern Europe that source energy from elsewhere. “As mid-term alternatives, we are focusing on greater localization, relocation of manufacturing capacity, or technical alternatives, similar to what is already common practice in the context of challenges related to semiconductor shortages and other recent supply chain disruptions,” Geng Wu, VolkswagenÂ’s head of purchasing, said in a statement.  RussiaÂ’s decision to throttle gas supplies to Europe has raised concerns that Germany might be forced to ration its fuel. Recent news that gas storage levels hit 90% ahead of schedule has soothed fears of acute shortages this winter, but Germany faces a challenge in replenishing depleted reserves next summer without contributions from Russia. Southwestern Europe or coastal zones of northern Europe, both of which have better access to seaborne liquefied natural gas cargoes, could be the beneficiaries of any production shift, a Volkswagen spokesman said by phone. The Volkswagen group already operates car factories in Portugal, Spain and Belgium, countries that host LNG terminals. Labor hurdles To be sure, any major production shift away from EuropeÂ’s biggest economy would face significant hurdles. VW has some 295,000 employees in Germany and worker representatives account for around half the companyÂ’s 20-member supervisory board. Any shift in production would likely involve a limited number of vehicles rather than wholesale factory shutdowns. While gas supplies for VWÂ’s plants are currently secured, the company has identified potential savings at its European sites to cut gas consumption by a “mid-double-digit percentage,” said Michael Heinemann, managing director of VWÂ’s power-plant unit. Still, the carmaker said it was concerned about the effect high gas prices could have on its suppliers.

Import pickup truck-killing Chicken Tax to be repealed?

After over 50 years, the so-called Chicken Tax may finally be going the way of the dodo. Two pending trade deals with countries in the Pacific Rim and Europe potentially could open the US auto market up to imported trucks, if the measures pass. Although, it still might be a while before you can own that Volkswagen Amarok or Toyota Hilux, if ever. The 25-percent import tariff that the Chicken Tax imposes on foreign trucks essentially makes the things all but impossible to sell one profitably in the US, which lends a distinct advantage to domestic pickups. Both the Trans-Pacific Partnership with 12 counties and Transatlantic Trade and Investment Partnership with the European Union would finally end the charge. According to Automotive News though, don't expect new pickups to flood the market, at least not immediately. These deals might roll back the tariff gradually over time, and in the case of Japan, it could be as long as 25 years before fully free trade. Furthermore, Thailand, a major truck builder in Asia, isn't currently part of the deal, and any new models here would still need to meet safety and emissions rules, as well. Automotive News gauged the very early intentions of several automakers with foreign-built trucks, and they weren't necessarily champing at the bit to start imports. Toyota thinks the Hilux sits between the Tundra and Tacoma, and Mazda doesn't think the BT-50 fits its image here. Also, VW doesn't necessarily want to bring the Amarok over from Hannover. There is previous precedent for companies at least considering bringing in pickup trucks after the Chicken Tax's demise, though. The Pacific free trade deal could be done as soon as this fall, while the EU one is likely further out, according to Automotive News. Given enough time, the more accessible ports could allow some new trucks to enter the market.

France may scrap diesel fuel subsidies in wake of VW scandal

Now that a particular German automaker has sneezed, it appears that French automotive subsidies will catch a cold. Count France among the growing legion of countries not happy about Volkswagen's admission that some of its diesel vehicles contain software that will artificially reduce emissions levels during testing. As a result, the French government is talking about reducing or eliminating diesel subsidies that make diesel fuel about 15 cents per liter (roughly 89 cents a gallon) cheaper than gas. The change would tax gas and diesel at the same rate. France may end the diesel tax credits as soon as the next fiscal year, Bloomberg News says, citing comments from French Environment Minister Segolene Royal this week. About two-thirds of the cars on France's roads are diesel, according to the CCFA, the French automaker association. In fact, diesels accounted for more than half of the new light-duty vehicles sold in Europe last year. That may drop to 35 percent by 2022 in part because of the scandal, according to automotive consultant LMC Automotive. Things could change even more France is considering letting more vehicles qualify for the 10,000-euro incentive for switching from old diesels to new plug-in vehicles. Last month, VW said that its cheater software might be installed in as many as 11 million vehicles, forcing the German automaker to set aside $7.3 billion to address the fallout from the scandal. Among other issues, VW and its Audi division were stripped of its Green Car of the Year Awards for the first time in the history of the awards bestowed by Green Car Journal. The scandal also forced Martin Winterkorn to resign as VW's CEO last month after eight years on the job and is delaying a number of the automaker's upcoming projects. Related Videos: News Source: Bloomberg NewsImage Credit: Mic V./Flickr Government/Legal Green Volkswagen Emissions Diesel Vehicles vw diesel scandal France subsidies