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The Insider: The emissions scandal and the tip of the iceberg

By / 6 years ago / Comment / No Comments

First let me say that I don’t dispute that it is totally and utterly wrong to knowingly mislead the public and we could debate the moral standpoint for hours. There is no doubt that someone very high up made an outstandingly bad business decision with the potential to bring down some of our best loved car brands. But will it fall? And are VW really the only carmaker to take this route? I don’t think so. Whilst some manufacturers have issued carefully worded press releases, the silence from others has been noticeable. Possibly VW are not alone, just the only ones who were found out – or chose to go public – so far.

And what about the American and European regulators who did not query the test results? I read a piece in a well-respected non-fleet publication which suggested that cheat devices had been around since 1994, and that unless said regulators had been on another planet for the past two decades, there was no way they wouldn’t have known that engine software was being manipulated under test conditions. As yet there is no suggestion any heads will roll from that direction.

At the time of writing, making good the issues is advised as recalls are limited to software tweaks on some models, and both software and injector fixes on others. It has been confirmed that the UK tax authorities will not amend tax contributions on affected models.

So what is the actual impact on fleet? If your cars are leased, the lease company holds the risk, congratulations. If you own them, you are watching the market with interest. However, when Joe Average buys a second-hand car – which is where most of our fleet cars end up – he wants to know if it will carry his golf clubs, the weekly shop, and the children, preferably in that order. He also wants it to be economical and reliable, end of. The value of the car to him is dictated by those items, all unaffected by the current predicament. He may give a nod to the environment if it saves him road fund licence and quantities of fuel; if he was really serious on that front he’d lease the latest models, new. I don’t see secondhand values being hugely affected.

Speaking with my own drivers, at the moment none of them is remotely concerned about driving one of the affected cars now they know there is no tax disadvantage to continuing ownership. They are of course, as miffed as the rest of us about the immorality issues.

But it remains to be seen what happens when the recalls are under way, and that’s where I can see potential difficulty. If injectors are being re-worked, presumably this must affect fuel consumption, one assumes for worse rather than in a good way. What do you do then if your drivers complain they are getting less miles to the gallon, in a car you provided to them and where they had no choice in the matter?

If we avoid submitting a car for the recall, will that car in fact increase in value, because its tax remains low but with good fuel economy? Will HMRC ask for a list of those cars on which the recall hasn’t been done and insist those owners pay more tax? Far too complicated.

Will the authorities fine VW and insist the money is paid to the Revenue? How much? Should we all stop buying what are actually rather good cars? Yet something must be done to discourage other companies from taking similarly fraudulent actions. How big will the discouragement need to be? It’s not in anyone’s interest to make VW bankrupt as then everyone’s cars are worthless, unemployment rises both within the company and its associated contractors.

So it’s ‘wait and see’, but with the winter season now upon us, I daresay we will uncover more incidences of skating on thin ice.

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The Insider

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