German car maker Volkswagen has announced its third quarter figures and, as widely anticipated, it has reported a loss – its first operating loss for at least fifteen years. Following the revelations concerning the rigging of emissions in VW, Audi, Seat and Skoda vehicles with the EA 189 diesel engine built between 2009 and 2015, Volkswagen initially announced that it would reserve €6.5bn (£4.7bn) towards the cost of recalling the affected vehicles, but it seems the decision was taken to increase the amount to €6.7bn (£4.8bn). For the third quarter of the year Volkswagen reported a €3.48bn (£2.52bn) operating loss and a €2.52bn (£1.82bn) pre-tax loss, for the same period Volkswagen saw their vehicle sales drop by 3.7% and production by 11.6% compared with last year. Volkswagen has warned that profits for the full year were expected to be “down significantly” due to the enormous costs of handling the emissions rigging scandal, of course there are also going to be legal costs and the car maker mentions in its quarterly report that it is expecting the following types of litigation – criminal and civil charges from national regulatory authorities, class action or individual civil lawsuits from its investors and class action or individual lawsuits from its customers. Volkswagen also said that its legal costs “cannot be estimated at the current time” although they accept that “Considerable financial charges may be incurred as the legal risks crystallise”. Chief Executive and Chairman of the Board of Management, Matthias Mueller, said “The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear. We will do everything in our power to win back the trust we have lost.”
The value of Volkswagen shares have fallen significantly since the scandal came to light and the car maker announced that it would be reducing its budget for research and development, it has already achieved a reduction of more than €1bn (£.72bn). Chief Financial Officer, Frank Witter, said “The Volkswagen Group has very solid and robust liquidity resources. This will help us manage the challenging situation cause by the financial impact of the diesel issue”. CEO Matthias Mueller recently said that Volkswagen was made of “strong stuff” and had a good chance “to shine again in two to three years”.
Following the announcement of its third quarter figures Volkswagen shares rose 3.2%.
Special Thanks WillVision Photography for providing the image.
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Toyota is once again the world leaders for car sales after knocking Volkswagen off the top spot. This is not entirely a result of the emissions rigging scandal as the figures only include a little less than two weeks of sales following the admission from VW that some of its diesel cars had been fitted with the defeat device. The scandal has all but destroyed confidence in the German car maker and some analysts are predicting it may take many years before VW will be able to reclaim their place in leading the world for global car sales. Volkswagen has revealed a new strategy in which they will focus on electric and hybrid vehicles, with the next Phaeton saloon to be released as an all-electric version. In the meantime Toyota is about to launch its new and redesigned version of its best selling hybrid – the Prius, boasting that it will have better fuel efficiency.
Volkswagen has admitted that 11 million vehicles around the world have been affected by the emissions rigging scandal, with around 1.2 million said to be affected in the UK. VW owners are becoming angry and frustrated about how long it is taking for information to reach them, the Managing Director of Volkswagen Group UK, Paul Willis said “This is a very serious matter and the most important people in all this are our customers. We are trying our hardest; it is not the case that we are sitting on information here.” Mr Willis warned that it was likely to take until the end of 2016 before the recall was complete, saying that “It’s better to be thorough and get it absolutely right, rather than do it in haste.”
The German magazine Der Spiegel recently reported that “at least 30 people” had been involved in the emissions rigging scam but this was dismissed by Volkswagen as being “completely without basis” and that a German criminal investigation had so far discovered that there were a lot fewer than the figure quoted by Der Spiegel. A spokesman for the prosecutors in Brunswick, Germany, Klaus Ziehe said that “more than two, but a lot fewer than 10 people” identified. Matthias Mueller, the new Chief Executive of VW, has said that four employees had been suspended and that this included three executives.
Volkswagen has taken a charge of €6.5 billion against their third quarter earnings towards the costs of recalling around 11 million vehicles around the world; this is widely expected by analysts to plunge the company into the red.
Special Thanks David Fernandez for providing the image.
]]>It now appears that 11 million cars around the world were installed with the defeat device, although Volkswagen has said that the software has not been activated in the majority of them. The German transport minister Alexander Dobrindt admitted that the number of vehicles affected in Germany alone is around 2.8 million, almost six times as many as those in the United States.
Sales of diesel cars are anticipated to fall off and tougher standards of testing are widely expected worldwide, Switzerland has already taken the step of banning the sale of some Volkswagen models. Law suits have quickly been launched in the United States and criminal investigations are likely to take place, it is going to be an extremely difficult time for the Volkswagen brand.
Special Thanks La Moncloa Gobierno de España for providing the image.
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It seems that the majority of us have a deep seated mistrust of the motor trade in general, from back street garage to high end dealership – tales abound of overcharging, shoddy workmanship, dishonesty, negligence… the list goes on, no wonder so many people are fearful about the service they will receive when booking in their car.
A new survey carried out by Halfords has revealed that over 10 million cars failed the MoT test last year because owners would rather stay away from garage workshops, even when they know there is a problem – and failure rates are increasing every year. The annual appointment for an MoT test is sometimes the only contact some owners ever have with a garage workshop, routine servicing is avoided so the opportunity for an early diagnosis is missed, often resulting in an even more expensive repair bill. This is despite the fact that we all know that vehicles with a fully recorded service history are much more likely to sell faster and at a higher price.
It should be said of course, that there are also many, many people who have built up a great relationship with their local garage and rely upon them completely for any servicing and repairs required and it is unfortunate that the reputable dealerships and workshops have been tainted in the same way as the “dodgy” dealers.
Keeping your fingers crossed and hoping for the best is not ideal when booking your car in for an MoT test and the SMMT (Society for Motor Manufacturers and Traders) have launched a website to help you make some basic checks. The SMMT call these checks the “minute or two” MoT check and we have listed the main points for you.
Check your headlights and indicators are all working properly
Ensure your brake lights are functioning as they should
Your number plates should be clean and legible, they should also comply with the rules for font and letter spacing
Check the condition of your wheels and tyres. Minimum tyre tread depth is 1.6mm, it is recommended that tyres are changed at 3mm
The full length of all seatbelts should be checked for damage, tug sharply to test they are working as they should. Check the driver seat to ensure it has full adjustment
The windscreen should have no damage larger than 10mm in the area swept by the wipers in front of the driver, or more than 40mm elsewhere
The windscreen wipers should be in good condition with no tears or holes in the rubber
Make sure your screen wash is topped up
Check the horn is working
You should have enough fuel and engine oil for the workshop to run the car and test the emission levels, otherwise the MoT test cannot be completed
To see the full SMMT list go to PassMyMOT.co.uk
These checks are so simple and can save you a lot of time and money, if you are unsure or need help with this the SMMT say that UK dealerships are ready to give advice and assistance.
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Once again we have more vehicle safety problems hitting the headlines as four Japanese manufacturers are to recall more than 3 million cars.
The latest global recalls are affecting Toyota, Honda, Nissan and Mazda and are due to a potential airbag safety issue, in all there will be more than 3.4 million recalls with around 150,000 of them in the UK. The problem was discovered after five incidents occurred in Toyota cars where the front passenger airbag either over inflated in the event of an accident or did not inflate at all, no injuries have been reported and none of the cases were in the UK. The defective part was supplied by Japanese component maker Takata Corp. Honda, Nissan and Mazda state that there have been no reports of incidents involving their vehicles to date.
Toyota cars affected are the 2000 – 2004 versions of Avensis, Avensis Verso, Camry, Corolla, Lexus SC430, Picnic and Yaris.
Honda cars affected are CR-Vs built between 2002 and 2003 and Jazz and Stream variants built between 2001 and 2002.
Nissan cars affected are Almera, Almera Tino, Patrol, Terrano II, 4 x4 Pickup and X-Trail built between 2000 and 2004.
Mazda cars affected are Mazda 6 and RX-8 bought between 2002 and 2003.
All of the manufacturers involved have said they will replace the faulty part free of charge and will be in touch with their customers over the next 30 days, replacing the part should take one to two hours and it can be carried out by your local dealer or the dealership where the vehicle was purchased.
If you are worried about whether your car will be affected or not, or just want some advice regarding these recalls we suggest that you go to your local dealer or the dealership where you purchased your vehicle. Toyota owners can go to www.toyota.co.uk and enter their registration number to find out if their vehicle is affected, Nissan owners can call 01923 899334 for more information and Mazda owners can ring 0845 7484848 for advice. Honda has requested that owners “visit their local dealer with any immediate concerns”.
Special Thanks to Ford Asia Pacific for providing the airbag image.
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