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How should Volkswagen deal with its diesel problems?

The hounds of hell are bearing down on Volkswagen in the wake of allegations of cheating on diesel emissions testing. In just a single day, Volkswagen's stock has dropped 23 percent and the German government has announced that it is going to investigate a far larger number of vehicles over emissions violations. The American storm is quickly becoming a global one. Volkswagen sells over a million diesel vehicles a year and also has more than 13 percent of the automotive market overall – it was the number one automaker in the world up until the scandal. Yet in a matter of hours, Volkswagen has also become a pariah with potential fines and recalls that may be dwarfed by how the alleged lies and deceit change how governments and consumers view the company. Consumers are really going to be the key to the company's survival. It's those consumers who are really going to be the key to the company's survival. Every single one of them now finds themselves with a product that was sold illegally and may not be registered until recall work is done. What's worse is that Volkswagen doesn't yet have a solution for the emissions issue to offer these customers. It should also be noted that this is not the first time Volkswagen has found itself in violation of EPA emission regulations. Volkswagen is in a world of trouble, so what now? As a car dealer and former financial analyst who took several companies public, I believe Volkswagen can and should consider three points of action that would make an enduring difference in the times to come. 1. Offer affected TDI owners a compelling reason to stay with the brand. Recall work and a cup of coffee at the dealership are not going to be enough to placate current owners. Volkswagen should provide compensation for customers at the earliest opportunity and offer some type of inducement that keeps them within the fold. This shouldn't be the industry's version of a Chuck E. Cheese coupon - a small discount on a new vehicle. Volkswagen needs to offer something along the lines of a strong warranty extension of the entire powertrain (not just the emissions system) or some type of valuable feature upgrade for these vehicles so that owners feel that they have been treated fairly. Perhaps a combination of a brand new navigation system, software upgrades for the infotainment components, or some type of basic free WiFi service would be a healthy act of generosity.

Volkswagen decides to keep Lamborghini and Ducati, transfers Bentley to Audi

Investors in the market for a high-end Italian manufacturer that peddles performance will need to keep looking. Volkswagen announced it will hang on to Lamborghini and Ducati in the foreseeable future. Executives in Wolfsburg, Germany, are making far-reaching changes to the Volkswagen Group to reboot it with a big focus on technology. Credible rumors claimed that the people in charge of the carmaker wanted to carve out Lamborghini — which owns Ducati — and ultimately list it, or at least a chunk of it, on the stock market in order to fast-track the group's electrification strategy. Going electric is expensive, so selling Lamborghini would have helped fund the expansion, and high-octane supercars don't easily go hand-in-hand with zero-emissions cars. "Volkswagen needs to change from a collection of valuable brands and fascinating combustion-engine products that thrill customers with superb engineering to a digital company that reliably operates millions of mobility devices worldwide," summed up Herbert Diess, the group's boss, during a September 2020 meeting. His team ultimately decided not to fully divest both brands. It's too early to tell whether part of Lamborghini will be listed on the stock market, as some insiders have suggested, or if those plans are off the table, too. Changes are coming to Bentley as well. While it's not being spun off either, it will fall under the Audi umbrella starting on March 1, 2021. Volkswagen explained linking the two companies will "allow for synergies to be achieved as part of the electrification strategy of the two premium brands," a statement which suggests they will share a growing number of components during the 2020s. Unverified rumors claim that Bentley will notably get its own version of an ultra-luxurious electric SUV code-named Landjet that Audi is currently developing. We've reached out to Bentley for more details, and we'll update this story if we learn more. Bugatti's future wasn't mentioned in the release; unconfirmed reports suggest it will be traded for a stake in Croatian start-up Rimac. Volkswagen's supervisory board also reaffirmed its support for Diess, who was appointed CEO in 2018 and who has played a significant role in the company's transformation. Finally, the board approved the development of what a statement refers to a future leading electric vehicle sold by the Volkswagen brand that will be developed and manufactured in Wolfsburg.

Audi says new 48 volt micro-hybrid system improves fuel economy, paves way for electrification

Most cars use a 12-volt system to power their electrical components. But, with more and more electric bits and bobs being added to new vehicles, a dozen volts is looking a bit weak these days. In fact, Audi says that standard 12-volt systems are being stretched "to their very limits." Enter 48 volts. If used in a car that gets 40 mpg, that would translate to around 43.5 mpg. Audi is testing a supplemental 48-volt electric system in two prototype vehicles – modified mild-hybrid versions of the A6 TDI and the RS 5 TDI – in order to add in more electric technology (an electric compressor, for example, to improve acceleration) and "convenience systems for dynamic chassis control." Audi says it has more applications in the pipeline, but the overall gist is that the German automaker sees 48 volts as an "important building block in electrification strategy." As you can see in the picture above (click to enlarge), the RS 5 TDI concept uses a li-ion battery installed in the back of the car and an alternator to provide 48 volts when the engine is off. Audi says that the 48-volt system can save up to 0.4 liters of fuel per 100 kilometers. To put that into US numbers, if used in a car that gets 40 miles per gallon today, that would translate into a bump up to around 43.5 mpg. The Advanced Lead Acid Battery Consortium (ALABC) is also working on a 48-volt system to improve fuel economy and we've got a deep dive of Audi's electric turbocharger here. Even more powerful and efficient – the new 48-volt technology from Audi Important building block in electrification strategy More voltage and more power for new technologies Scalable platform concept suitable for wide-ranging uses Ingolstadt, August 25, 2014 – Audi is to upgrade part of its vehicle electrical system from twelve to 48 volts. The move represents another technical building block for facilitating the integration of new automotive technologies while increasing the power and efficiency of its cars. "We are using the full bandwidth of electrification in our drive principles strategy. Running part of the vehicle electrical system at 48 volts plays a central role in this," commented Prof. Dr. Ulrich Hackenberg, Member of the Board of Management for Technical Development at Audi. "It enables us to make more energy available.