GROUP - 4

Abhimanyu Singh Ashita NegiJayasuryaa HNainika JainRohan BharajTushar

BACKGROUND

Volkswagen, headquartered in Wolfsburg, Germany is one of the most iconic automobile manufacturers in the world.

It was founded by the Nazi Socialist Party under the rule of Adolf Hitler in 1937, then known as Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH. Later that year, it was renamed simply Volkswagenwerk, or “The People’s Car Company.”

Parent Company : Volkswagen AG

It operates more than 60 production plants around the world

Volkswagen (10.1 million units sold) was the 2nd biggest car manufacturer after Toyota (10.2 million units sold) in 2014.

VW overtook Toyota in the first half of 2015 from January to June by selling 5.04 million units as compared to 5.02 million of Toyota but ended up 2nd in 2015 by selling 9.93 million units as compared to 10.15 million units of Toyota.

Volkswagen emissions scandal What has VW done?

Volkswagen has been cheating in emission tests by making its cars appear far less polluting than they are. The US Environmental Protection Agency discovered that 482,000 VW diesel cars on American roads were emitting up to 40 times more toxic fumes than permitted - and VW has since admitted the cheat affects 11m cars worldwide.

How did they do it?VW’s “defeat device” is not a physical device but a programme in the engine software that lets the car perceive if it is being driven under test conditions - and only then pull out all the anti-pollution stops. “Clean diesel” engines cut emissions through techniques such as adjusting air-fuel ratios and exhaust flows, and in some (though not most VWs) injecting a urea-based solution to render NOx harmless. When running normally, requiring greater performance, VW’s controls would not operate in the same way.

How does the defeat device know it's being tested?The EPA tests have known practices and profiles. In many cases, the test vehicles are put on rollers and run at a certain speed for a certain time, then at another known speed for another known period. The car's central computer can detect whether inputs match those expected in test conditions.

How was the scandal exposed?An NGO, the International Council on Clean Transportation (ICCT), performed independent – and crucially on-road – emissions tests, on the VW Passat, the VW Jetta, and a BMW X5. These tests followed five routes on similar lines to the EPA simulations: highway, urban, suburban and rural up/downhill driving. The emissions performance of the Volkswagen, but not the BMW, cars was so much worse than expectations that the ICCT ran further tests on a dynamometer. In these circumstances, the cars passed with flying colors. It was at this point that the ICCT contacted the EPA.

Causes of the scandal To overcome fundamental problems with the company’s

system to for controlling harmful emissions by it’s smaller diesel cars

Inadequate internal controls

Ambitious goals

Tiff with former CEO

Consequences of the scandal 11 million cars affected worldwide (5,00,000 cars in US;

70,00,000 cars in Europe)

Engines emitted nitrogen oxide pollutants up to 40 times above what is permitted in the US that may result in 1m tonnes of air pollution every year

VW recalling millions of cars worldwide from January 2016 for which it has set aside €6.7bn ($7.3bn) to cover costs. That resulted in the company posting its first quarterly loss for 15 years of €2.5bn ($1.84 bn) in October 2015

The EPA has the power to fine a company up to $37,500 for each vehicle that breaches standards that may result in a maximum fine of about $18bn

The costs of possible legal action by car owners and shareholders "cannot be estimated at the current time”

Share prices have fallen by a third resulting in a loss of €30 billion in market-capitalization

Steps taken by Volkswagen Volkswagen is conducting an internal investigation, aided by U.S.

law firm Jones Day.

VW suspended at least two engineers — Ulrich Hackenberg, an Audi executive who was head of technical development at the VW brand; and Wolfgang Hatz, a Porsche manager who was responsible for engines and transmission systems across the VW group

Martin Winterkorn, the CEO of VW Group resigned 5 days after the scandal broke out. Matthias Muller, CEO of Porsche has taken over

In U.S Volkswagen has promised owners $500 in cash plus $500 in gift cards -- at a cost of about $250 million.

Future plan for Volkswagen "My most urgent task is to win back trust for the

Volkswagen Group - by leaving no stone unturned," Mr. Matthias Muller, new CEO of Volkswagen

Volkswagen needs to demonstrate a renewed commitment to the environment, consumers and its own integrity in order to recover its brand image.

Volkswagen is accelerating efficiency program to improve profitability

Plan to equip all cars with Adblu technology and selective catalytic reduction

Future plan for Volkswagen

Increase focus on plug-in hybrids and electric vehicles.

The markets in USA, Mexico, and Canada will be combined and significantly strengthened to form a new North America region

Volkswagen will mandate new and stricter emissions testings which will be verified by an independent third party