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'Clean Diesel' leaves dirty taste for green-minded VW owners

Volkswagen developed the advertising campaigns for its "Clean Diesel" cars far better than the actual technology. In dozens of complaints filed with the Federal Trade Commission in September, green-minded consumers said they were enticed into buying diesels by the company's advertising, which touted the environmental benefits of new diesel technology. Those alleged benefits convinced many to buy cars they otherwise would not have considered. In actuality, Volkswagen installed secret software in its cars that allowed the company's diesels to brazenly circumvent emissions standards. For environmentally conscious consumers, those decisions backfired. Instead of helping the environment, they drove cars that polluted at up to 40 times beyond the legal threshold for certain emissions. Now, those consumers are angry. They've asked the Federal Trade Commission to investigate Volkswagen for alleged deceptive advertising, and are hoping the federal agency can intervene and force Volkswagen to either buy back their compromised cars or negotiate trade-ins on favorable terms. An FTC spokesperson confirmed the agency is investigating. Many of those who wrote or called the agency said they felt like they had nowhere else to turn. For green-friendly drivers, it wasn't only about the money. It was also about the betrayal. "I am ashamed to drive this car on the road, as doing so is evidence that I have been taken for a fool." "It's awful for the environment," wrote one consumer from Shreveport, Louisiana, on September 24, days after the diesel scandal unfolded. "It's caused me anxiety thinking about the amount of emissions I have been producing." The motorist's comments echoed others filed with the FTC. Many owners felt trapped with cars they couldn't sell and cars they felt they could no longer drive in good conscience, knowing they spew nitrogen oxide at levels that violate the Clean Air Act. "I do not see how I can drive it knowing highly toxic pollutants are being produced," wrote another driver from Middletown, Rhode Island. "I have not driven the car since this news came to light." The two statements were among the 89 filed with the FTC's Consumer Sentinel Network in the week following the Environmental Protection Agency's announcement that Volkswagen had admitted rigging approximately 482,000 cars in America with software that allowed them to cheat emissions testing.

Piech and Winterkorn still at odds about VW leadership plan

Volkswagen Group Chairman Ferdinand Piech (above, right) and CEO Martin Winterkorn (above, left) will be meeting in the coming days to discuss who the next leader of the Volkswagen Group will be. This, of course, comes after a report last Friday in Der Spiegel where Piech said he didn't want Winterkorn to be the automaker's next chairman. Oh, to be a fly on the wall of that conference room. As Automotive News reports, Winterkorn had been widely viewed as the probable replacement for the 77-year-old Piech, until last week, when the current chairman said he was keeping the CEO "at a distance," in the German paper. While Winterkorn confirmed to German media on Monday that he still had a job, analysts aren't sure what Piech's comments will mean for the 67-year-old CEO's future, with some indicating he may end up being a "lame duck" leader. According to AN, Piech doesn't think that Winterkorn has the vision to lead the sprawling Volkswagen Group empire, even though the current CEO has the support of a number of other VAG stakeholders. "Piech knows what he is doing and will assume that he can get the supervisory board to implement his decisions," former BMW executive turned analyst Helmut Becker told German media, AN reports. Winterkorn has just over 18 months left on his contract, while Piech's term has another two years left on it, meaning it will still be some time before we find out how the Volkswagen Group's leadership issues play out.

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.