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VW execs didn't think diesel problem would be so serious

Volkswagen Group has admitted that former chairman Martin Winterkorn received two memos about the diesel scandal in 2014. Top execs ignored the problem because they didn't think it was a serious issue. VW disclosed these details to counter allegations in a German shareholder lawsuit that alleged the automaker violated the law by withholding the info from investors. A memo on May 23, 2014 first advised Winterkorn about emissions cheating. A memo on May 23, 2014, first advised Winterkorn about the study from the International Council on Clean Transportation, which identified the emissions cheating. According to VW, the document was part of the exec's weekend mail, and the company's investigation didn't discover whether Winterkorn actually read it. A rumor last month alleged this memo existed. Another memo for Winterkorn on November 14, 2014 was about several defects, including the diesel engines. The document estimated it would cost 20 million euros ($22 million US at current rates) to fix the problem. The chairman learned about the issue again on July 27, 2015, during a meeting on product issues. "Mr. Winterkorn asked for further clarification of the issue," according to VW's statement. Things got serious at the end of August 2015. Things got serious at the end of August 2015 when technicians explained the diesel issue to the legal department. VW came clean to the California Air Resources Board and the Environmental Protection Agency on September 3. A memo told Winterkorn the next day, which was also previously alleged. According to this investigation, management didn't believe the diesel problem would affect the stock price, and they estimated the cheating might cost at most a few hundred million dollars in fines. The execs were clearly wrong. The share price dropped after the scandal broke last September, and the problems have started to affect its divisions. According to Reuters, Audi reported it suffered 228 million euros ($249 million) in costs in 2015 from the emissions issue and repairing Takata's faulty airbag inflators. Volkswagen still doesn't know the exact costs of the scandal, but the automaker's law firm, Jones Day, plans to release a report in the second half of April to explain the whole affair. By that time, we might also know how VW plans to fix the problem because a judge recently gave the company until March 24 to outline a fix for the 2.0-liter TDI. CARB started evaluating a repair plan for the 3.0-liter TDI in early February.

Audi R8 Exclusive Edition gets laser beam headlights

We've long lamented the National Highway Traffic Safety Administration's draconian Federal Motor Vehicle Safety Standards, which contrary to their name, have actually prevented automakers from selling some substantial and important safety equipment, like advanced headlights, in the US market. Until now, apparently. To be fair, we've known Audi was prepping its advanced laser headlights for the US market, but that doesn't make their arrival any less exciting. Audi will begin offering DOT-approved high-beams that use advanced laser diodes on a limited run of V10-powered R8s. Exclusive to the, um, Exclusive Edition R8, the advanced lamps complement the standard LED low beams and dynamic front turn signals, offering "very bright and pure white light" for 25 lucky consumers. Here's some more techno babble about how the lights work – according to Audi's official release, there's a laser module in each headlight containing four high intensity laser diodes that fire out blue lasers. Then, a phosphor converter adjusts the 450-nanometer laser into visible light that fires up above 40 miles per hour. "When conditions permit," Audi's release reads, the laser high beams "greatly enhance visibility for the driver by projecting a low and wide beam of light on the road ahead." Naturally, we have questions, but Audi wasn't keen on releasing much info ahead of the R8 Exclusive Edition's Los Angeles Auto Show debut. The company confirmed that the new lights are DOT approved, which makes sense considering the LA introduction. We're also wondering how Audi's new Laser Lights differ from BMW's similarly named Laserlight system, offered on the i8. Both setups use lasers to replace conventional high beams, but BMW says it "adjusted to the maximum allowable light output for the US market." Audi was cagey about explaining if it modified the system to satisfy the feds. Ingolstadt also offered the typical "we don't comment on future product" when asked about future applications for its laser headlight technology. Beyond the advanced high-beam headlights, the R8 Exclusive Edition comes standard with Quantum Grey paint, 20-inch "Y Design" wheels, a carbon-fiber side blade with an orange stripe, and a whole bunch of interior trim upgrades, like full leather upholstery and Alcantara trim. Price start at $229,200, not counting $1,250 in destination charges. We'll have more on the R8 and its laser lamps when it debuts in a couple weeks. Related Video:

Audi rumored to buy Alfa Romeo, officials deny it

For more than two years, Volkswagen has been making public statements about its willingness to buy Alfa Romeo and quadruple the Italian brand's sales, and for just as long, Fiat CEO Sergio Marchionne has replied with some version of "Mr. Piëch, drop it." According to a report in Ward's Auto, all that jousting might be over: it claims that sources close to both Marchionne and Audi CEO Rupert Stadler admit that the two are in talks for Audi to buy not just Alfa Romeo, but a production plant in Italy. In fact, a final deal could possibly include partsmaker Magnetti Marelli.
Against that backdrop, a report by German news weekly Stern quotes a Fiat spokesmen as saying it doesn't comment on rumors and an Audi rep has said flatly that "There is no substance in the news." If a sale is being arranged, the timing would seem to point to how eager Fiat is to raise cash to complete its major initiatives. Even though Alfa Romeo continues to delay its return to the US, it just showed off the production version of the 4C at the Geneva Motor Show (shown above) and said that preferred Fiat dealerships here would get them. Then there's Alfa's recently concluded deal with Mazda to develop a roadster based on the next generation MX-5 Miata - a deal that would seem to help both the Italian and Japanese brands.
The monetary issues are troublesome, though. Fiat is taking a beating in the European market and its weak-kneed balance sheet is delaying gotta-have-it products like the Jeep Cherokee. Fiat has been talking to banks about getting money to buy the rest of Chrysler and those financial institutions have also raised issues about debt and cash reserves, and the nasty game of chess Fiat is playing with the United Auto Workers (and now the court system about the portion of Chrysler it doesn't own) could end up blowing another hole in Marchionne's plans. It is possible that this could finally have convinced Fiat to at least see how serious Audi's parent company, Volkswagen, is about buying Alfa Romeo. Or it could be just another rumor.