VW reached a settlement with US and California authorities to recall 83,000 diesel cars with 3-liter diesel engines, resolving the last major part of its emissions cheating scandal.
The agreement, involving VW, Audi and Porsche cars, is another step towards allowing Volkswagen to put the emissions cheating scandal behind it.
In June the German auto maker agreed to a $15 billion settlement for another 475,000 vehicles affected by the scandal.
The Environmental Protection Agency (EPA) estimates that the total cost of the 3-liter settlement, including buybacks, repairs, and environmental remediation, at about $1 billion.
VW reached a $14.7 billion settlement with 550,000 owners of smaller, 2-liter diesel cars in September.
About one-quarter of the affected owners will be able to sell their vehicles back to VW at a price yet to be determined. The other 60,000 vehicles will be repaired at no cost to their owners, becoming fully compliant with clean-air laws.
US District Judge Charles Breyer said owners of the 3-liter cars made between 2009 and 2016 would get “substantial compensation” for having them fixed or repaired.
However, there were some remaining issues to be resolved and another hearing will be held on December 22, he said.
VW spokeswoman Jeannine Ginivan said the deal was “another important step forward in our efforts to make things right for our customers”.
The company admitted in September 2015 to installing secret software in 475,000 US 2-liter diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing than they really were. They emitted up to 40 times the legally allowable pollution levels.
The $15 billion settlement in June covered those vehicles, including an offer to buy them all back.
The US Justice Department said VW had agreed to contribute another $225 million to a fund to offset excess diesel emissions.
In a separate filing, California’s government said VW would increase the number of electric vehicles it sells in the state.
Robert Bosch, the German engineering company that made the software for the VW diesels, has also agreed in principle to settle civil allegations at a cost of about $300 million.
Porsche has unveiled its plans to build an all-electric car aimed at challenging Tesla’s dominance of the battery-powered sports car market.
The German automaker said it would create more than 1,000 jobs via a €700 million investment in new facilities and assembly line.
Porsche’s Mission E, revealed as a concept car earlier this year, is due to go on sale by 2019.
The four-door car’s range will be 310 miles, and hit 62mph in 3.5 seconds.
This pitches the Mission E – a name unlikely to stay once the launch date nears – against Tesla’s powerful Model S.
Porsche is owned by Volkswagen Group, currently embroiled in Dieselgate scandal, which has said it would invest in a range of all-electric and hybrid vehicles across its brands over the next few years.
Dr. Oliver Blume, chairman of Porsche’s executive board said putting Mission E into full development was the “beginning of a new chapter in the history of the sports car”.
Porsche said the car would be charged via an 800-volt unit specially developed for the vehicle, which is twice as powerful as today’s quick-charge system.
The lithium-ion batteries integrated within the vehicle floor will have enough power for 80% of its mileage range after 15 minutes charging, Porsche said in a statement. The vehicle can optionally be “refueled” wirelessly by induction via a coil set into a garage floor.
The four-seat car features energy storage technology derived from the Le Mans-winning Porsche 919 Hybrid race car.
The €700 Mission E investment was part of a €1 billion spending plan on new facilities announced by Porsche on December 4.
Paul Walker was responsible for his own death in a high-speed crash of a 2005 Carrera GT, automaker Porsche has said.
The Fast and Furious actor was a passenger in the Porsche driven by his friend Roger Rodas when it hit a pole and burst into flames in November 2013.
Paul Walker’s daughter, Meadow, filed a wrongful death case in September claiming Porsche took safety shortcuts.
However, the automaker has said Paul Walker “knowingly and voluntarily assumed all risk” of being a passenger in the car.
The actor was “a knowledgeable and sophisticated user of the 2005 Carrera GT”, Porsche said in legal papers filed last week.
“PCNA [Porsche Cars North America] alleges that Mr. Walker knowingly and voluntarily assumed all risk, perils and danger in respect to the use of the subject 2005 Carrera GT,” said the manufacturer.
It added: “The perils, risk and danger were open and obvious and known to him, and he chose to conduct himself in a manner so as to expose himself to such perils, dangers and risks, thus assuming all the risks involved in using the vehicle.”
Porsche also said in its defense papers that the car in which Paul Walker was travelling, had been “abused and altered” and was “misused and improperly maintained”.
The statement adds: “At the time the subject 2005 Carrera GT was originally manufactured, sold and delivered, it comported with state of the art.”
After a four-month investigation following the crash on November 30, 2013, the police said the Porsche, driven by Paul Walker’s friend Roger Rodas who also died, was travelling at 94mph in a 45mph zone when it hit a lamp post.
Meadow Walker’s legal claim contends the car was travelling much slower when it went out of control and that her father’s seatbelt was defective.
Her legal documents allege the car lacked “features that could have prevented the accident or, at a minimum, allowed Paul Walker to survive the crash”.
In response to Porsche’s defense, a representative for Meadow Walker told TMZ: “It is beyond regrettable that Porsche is trying to deflect its own responsibility by blaming the victim, Paul Walker, for his own death by getting into the passenger seat of its Carrera GT.
“Contrary to Porsche’s assertions, the facts are clear: Paul was the passenger in a car that was not designed to protect its occupants, in a crash on a dry, empty straightaway in broad daylight and at speeds well below the vehicle’s advertised capabilities.”
Roger Rodas’ widow filed a similar case last year, but Porsche said the crash was his fault, rather than down to design flaw.
According to Germany’s transport minister, around 98,000 VW petrol vehicles are caught up in the automaker’s latest emissions scandal.
That follows an admission by VW that it had found “irregularities” in CO2 emissions levels that could affect 800,000 vehicles.
It came to light as a result of an internal investigation by the firm following the diesel emissions scandal.
On November 3, VW admitted that an internal investigation had revealed that carbon dioxide emissions and fuel consumption were understated during standards tests on about 800,000 cars.
The company said the issue mainly affected diesel cars.
However, on November 4, Germany’s Transport Minister Alexander Dobrindt told the country’s parliament: “Today we were told that among the affected vehicles are 98,000 petrol vehicles”.
VW, Skoda, Audi and Seat vehicles could be affected and the company estimates the CO2 problem could cost it about €2 billion.
Volkswagen had already set aside €6.7 billion to meet the cost of the initial emissions scandal.
News of the issue with CO2 emissions sent VW shares down by 5.6% on November 4.
The company’s shares have lost about a third of their value since September, when the scandal first broke.
It came to light after the US Environmental Protection Agency (EPA) found VW software had detected when vehicles were undergoing emissions tests, and altered the way they operated to give more favorable results.
On November 2, the EPA also alleged that VW had fitted nitrogen oxide defeat devices on 3.0 liter diesel engines used in Porsche, Audi and VW vehicles – a claim VW denied.
Porsche also denied the allegations, but its North American division announced it is discontinuing sales of Porsche Cayenne diesel sport utility vehicles until further notice.
The carmaker is recalling 11 million diesel vehicles worldwide that were fitted with the software that circumvented tests for emissions of nitrogen oxide.
That recall is for cars with variants of the EA 189 diesel engine built to the “Euro 5” emissions standard.
Meanwhile, VW is recalling 92,000 cars in the US over a mechanical problem that could affect vehicles’ brakes.
The German carmaker said part of the camshaft could shear off, causing loss of vacuum in the power brakes, which could lengthen stopping distances.
Today’s recall includes Beetle, Golf, Jetta and Passat models from 2015 and 2016. The cars have 1.8 liter and 2 liter turbocharged petrol engines.
VW discovered the problem after getting reports of camshaft failures. A fix is expected by the end of March.
According to the Environmental Protection Agency (EPA), VW cars with bigger diesel engines also contained software devices designed to cheat in emissions tests.
Porsche, Audi and VW cars are all included in this new investigation, which affects at least 10,000 vehicles.
The EPA said that cars with 3.0 liter engines from the years 2014 to 2016 were affected.
However, VW denies the vehicles have software designed to cheat tests.
Instead the automaker says that cars with the 3.0 liter diesel V6 engines “had a software function which had not been adequately described in the application process”.
VW said it was cooperating with the EPA to “clarify the matter”.
“Volkswagen AG wishes to emphasize that no software has been installed in the 3-liter V6 diesel power units to alter emissions characteristics in a forbidden manner,” the company said in a statement.
Meanwhile, Porsche said it was “surprised” by the EPA’s allegations.
Photo Reuters
“Until this notice, all of our information was that the Porsche Cayenne diesel is fully compliant,” it said in a statement.
The EPA says the investigation is ongoing.
“VW has once again failed its obligation to comply with the law that protects clean air for all Americans,” said Cynthia Giles, assistant administrator at the EPA’s enforcement unit.
The EPA identified these diesel models as containing software aimed at cheating tests: 2014 VW Touareg; 2015 Porsche Cayenne; 2016 Audi A6 Quattro, A7 Quattro, A8, A8L and Q5.
In early September, VW admitted to the EPA that cars from the model years 2009 to 2015 contained software designed to cheat emissions tests.
It said that 11 million cars were affected.
That prompted US regulators to run further tests designed to detect such defeat devices and led to today’s announcement from the EPA.
“These tests have raised serious concerns about the presence of defeat devices on additional VW, Audi and Porsche vehicles. Today we are requiring VW Group to address these issues. This is a very serious public health matter,” Cynthia Giles said.
Regulators all over the world are now looking at VW’s diesel cars and the company is also facing criminal investigations.
State and federal prosecutors in the US have announced criminal investigations and German prosecutors are looking into the scandal.
VW CEO Martin Winterkorn resigned in late September as the scale of the scandal emerged.
At the time Martin Winterkorn said he was “not aware of any wrongdoing on my part” but was acting in the interest of the company.
Last month Volkswagen reported its first quarterly loss for at least 15 years after taking a big charge to cover the costs of the scandal.
VW said it had set aside €6.7 billion ($7.4 billion) to cover costs related to emissions cheating, which left it with a €2.52 billion pre-tax loss for the third quarter of the year.
Many analysts expect that VW will have to set aside more money to cover the recall of cars, penalties and lawsuits.
Jameson Brooks Witty, one of the two suspects accused of stealing the roof of the burned-out Porsche Paul Walker was a passenger in at the time of his death last year, has been jailed for six months.
One of the two suspects accused of stealing the roof of the burned-out Porsche Paul Walker was a passenger in at the time of his death has been jailed for six months (photo PA)
Teenager Jameson Brooks Witty and his co-defendant, Anthony Edward Janow, 26, pleaded no contest to misdemeanor charges of destroying evidence, grand theft and resisting or delaying a police officer last week, after allegedly walking off with the roof panel from a tow truck carrying the destroyed Porsche Carrera GT from the crash site.
The car burst into flames after it crashed into a post in Santa Clarita, California, killing the driver and Paul Walker on November 30, 2013.
On Thursday, James Brooks Witty was sentenced to serve the maximum punishment for the crimes.
Anthony Edward Janow is set to learn his fate on October 23.
Wolfgang Porsche and his cousin and Porsche board member Ferdinand Piech are being sued by seven hedge funds over its failed takeover bid for Volkswagen.
They are seeking 1.8 billion euros ($2.4 billion) in compensation.
Porsche has been accused of misleading markets in the run-up to its takeover bid for VW in 2008.
Porsche initially dismissed speculation it was seeking to takeover VW, but later revealed that it owned or had positions on almost 74% of VW shares.
Some investors had bet against Volkswagen shares, expecting them to fall in the absence of any firm takeover bid from Porsche.
However, Porsche’s disclosure of an increased holding triggered an unprecedented stock market squeeze on VW shares as investors rushed to buy them to cover their short positions.
Wolfgang Porsche and his cousin Ferdinand Piech are being sued by seven hedge funds over its failed takeover bid for Volkswagen
Porsche, which has earlier faced similar cases, has denied any wrongdoing.
“Porsche SE and its supervisory board members will defend themselves with all available legal means,” the carmaker said.
Porsche’s attempt to take over Volkswagen eventually failed as it fell short of acquiring the required 75% stake.
The global financial crisis and the slump in the automotive sector made it difficult for the carmaker to raise enough money to buy the remaining stake.
Nevertheless, it accumulated large amounts of debt in the process and was sued by investors who accused it of misleading them.
In a dramatic turnaround of events, the firms agreed a deal in 2009 under which Volkswagen agreed to take over Porsche.
Volkswagen acquired a 49.9% stake in Porsche in 2009.
In 2012, the firms agreed another deal, under which Volkswagen bought the remaining 50.1% stake in Porsche for 4.46 billion euros plus one VW common share.
Porsche, Audi and Bentley – Volkswagen’s luxury brands – have posted record sales in 2013 helped by new model launches and a recovery in the global car market.
Porsche’s deliveries jumped 15%, Audi’s 8.3% and Bentley posted a growth of 19% in 2013, from a year earlier.
Demand for luxury cars has been growing in emerging markets such as China and India amid rising income levels.
Carmakers have also benefited from a recovery in demand from the US, one of the biggest markets for luxury cars.
Audi’s sales jumped 13.5% in the US during the period, from a year ago, while Porsche saw a growth of 21%. Bentley deliveries in the US rose 28%.
China was the other major growth market for the firm, with both Audi and Porsche posting nearly 20% growth.
However, Bentley’s sales in China declined 3% from a year ago.
Porsche, Audi and Bentley have posted record sales in 2013 helped by new model launches and a recovery in the global car market
VW has set its sights on becoming the world’s biggest carmaker by 2018.
The latest figures are likely to provide a big boost to VW’s ambitions.
Overall, Audi sold 1.57 million cars and sport-utility vehicles globally last year, Porsche sold 162,145 vehicles and Bentley’s sales totaled 10,120 units.
“We set an important milestone for Audi in the past year: We achieved our intermediate strategic goal of 1.5 million deliveries two years earlier than planned, and in fact comfortably exceeded it,” Rupert Stadler, chairman of Audi, said in a statement.
“This means that in the past four years alone, Audi has attracted more than 600,000 new customers.”
The numbers by Volkswagen come at a time when the global car market has been recovering from the slump seen in the years after the global financial crisis.
Data released on Thursday showed that car sales in China – the world’s biggest car market – rose 14% in 2013, from a year ago. That compares to an annual growth rate of less than 5% seen in the previous two year.
According to the China Association of Automobile Manufacturers 21.98 million vehicles were sold in China last year.
Analysts also expect 2013 to be the best year for US auto market since 2007, with total annual sales expected to reach nearly 15.6 million units.
If that figure is met, it would mark a strong recovery from 2009 when sales fell to 10.4 million during the depths of the recession.
There is no evidence that the Porsche carrying Paul Walker and his friend, Roger Rodas, had mechanical issues before it crashed, investigators said.
The investigation also ruled out debris or other roadway conditions as causing the car in which Paul Walker was a passenger to careen into a light pole and tree.
“We’re looking at speed and speed alone,” a law enforcement official with knowledge of the investigation told The Associated Press. The official was not authorized to speak publicly about the investigation and spoke on condition of anonymity.
There is no evidence that the Porsche carrying Paul Walker had mechanical issues before it crashed
Investigators with the Los Angeles County Sheriff’s Department have calculated a speed range at which they think the car was traveling but won’t firm up that number until Porsche engineers come to California next month to extract information from onboard data collectors. The official would not disclose that range.
Though the car exploded in flames after the crash, the data recorders survived and may produce information to pinpoint the speed.
The official told AP that the Porsche appeared to have negotiated a curve in the road just fine before crashing in an industrial park about 30 miles northwest of downtown Los Angeles.
“They were well out of the curve when they lost control,” the official said.
Porsche has announced it has already beaten its annual record for most cars sold.
The carmaker sold 128,978 cars worldwide in the 11 months to November – already beating the 118,868 sports cars sold in the whole of last year.
Porsche marketing and sales chief Bernhard Maier said that last month alone was up 39% on November 2011.
Demand came from China and the US, where there was 70% more demand for Porsches last month than in 2011.
The demand from other countries has picked up for slack demand in recession-hit Europe.
The result has been a 7.1% fall in car sales in Europe so far this year, with some southern European markets seeing sales slump by about a fifth.
Porsche sold 128,978 cars worldwide in the 11 months of 2012, already beating the 118,868 sports cars sold in the whole of last year
Premium carmakers, such as Porsche and BMW, and budget manufacturers, such as Hyundai, are doing relatively well. But mid-market players – such as Ford and General Motors’ Opel and Vauxhall units – are having a torrid time, suffering falling sales, profits and market shares.
David Bailey, a professor of international business strategy and economics at Coventry University Business School, told the BBC that Porsche’s success was driven by “huge growth in emerging markets”.
“The premium producers are doing very well and the lower end is doing well too. What you have is a bit of a squeezed middle.”
GM estimates it stands to lose more than $1.5 billion (1.2 billion euros) on its European operations this year. This week, it said it would end car production at its Bochum manufacturing plant in Germany in 2016.
“People want to be seen in a BMW or an Audi or a Mercedes, it’s a rapidly-developing consumer market,” said IHS Automotive analyst Tim Urquhart.
On Porsche, he said that the “Cayenne has really captured the imagination in the US and China”.
At the higher end of the car market, Italy’s Maserati sold 6,200 last year and said on Wednesday that sales in the first nine months of this year were up 2% to 4,754.
But it hopes to sell 50,000 Maserati a year by 2015. It plans to sell the sixth-generation of the four-door Maserati model, starting in the 150,000-euro range.
By comparison, a Ferrari starts at 20% below the Maserati. A Porsche Panamera costs from 77,000 to 166,000 euros.
Meanwhile, Indian-owned luxury carmaker Jaguar Land Rover said on Wednesday that it sold 324,184 vehicles during the first 11 months of the year, up 32% from the same period last year.
It is planning to set up a factory in Saudi Arabia and began construction of a factory in China last month.
In July, German mass-market rival Volkswagen agreed a deal to pay 4.46 billion euros ($5.6 billion) to buy the remaining 50.1% stake in Porsche it did not already own.
Volkswagen had acquired a 49.9% stake in Porsche in 2009.
Volkswagen has agreed a deal to buy the remaining 50.1% stake in Porsche it doesn’t already own by the start of next month.
VW will pay 4.46 billion Euros ($5.6 billion) plus one VW common share to acquire the stake.
Volkswagen and Porsche had agreed in 2009 to merge by the end of 2011, but have since faced legal obstacles.
The deal is likely to reduce costs and boost VW’s earnings as it seeks to become the world’s biggest carmaker.
Volkswagen and Porsche had agreed in 2009 to merge by the end of 2011, but have since faced legal obstacles
“The accelerated integration will allow us to start implementing a joint strategy for Porsche’s automotive business more quickly and to realize key joint projects more rapidly,” said Hans Dieter Poetsch, chief financial officer of Volkswagen.
Both the firms had been seeking to accelerate the merger. However, one of the stumbling blocks for the deal was the likelihood of a big tax bill for both the firms.
Volkswagen had acquired a 49.9% stake in Porsche in 2009.
According to various reports, if it bought the remaining stake before 2014, the two companies may have had to pay more than 1 billion Euros in taxes, making the move less attractive.
Analysts said that by structuring the deal as one which involved the payment of one VW common share to Porsche, the firms may be able to avoid that bill.
They said that such a move means that the deal may see it being classified as a restructuring of the company rather than a takeover.
“It’s a great deal for Volkswagen, both financially and in operative terms,” said David Arnold, an analyst with Credit Suisse.
Meanwhile, Volkswagen said in a statement that “the accelerated integration model that has now been agreed can be implemented on economically feasible terms”.
Once completed, the deal will bring an end to one of the most dramatic takeovers in the car manufacturing industry.
Porsche had been trying to takeover Volkswagen for many years.
Its attempt failed in 2009 as it fell short of acquiring the required 75% stake.
The global financial crisis and the slump in the global automotive sector made it difficult for the carmaker to raise enough money to buy the required stake.
But none the less, Porsche accumulated large amounts of debt in the process and was sued by investors who accused it of misleading them.
In a turnaround of events, the firms agreed a deal in 2009 under which Volkswagen agreed to takeover Porsche.
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