Volkswagen Emissions Scandal and Its Impact in Car Industry

Volkswagen Emissions Scandal and Its Impact in Car IndustryVolkswagen had emission issue as it defeats the program to pass testing from Environmental Protection Agency. This is called Volkswagen emissions scandal. Why did this matter happen? Tons of question flow like river to know more about the scandal. As you know, this problem only appeared for diesel engine. Volkswagen claimed their diesel engine was safe and eco-friendly. On contrary, specific programmed software was installed in car’s system to dispose the real result of emission level.

Volkswagen Emissions Scandal Timeline

Volkswagen develops diesel with capability to reduce pollution level. The Company wanted to obtain Mercedes technology for diesel because this manufacturer only focus on petrol engine. The system is new and advanced which is applied in TDI (Turbocharged Direct Injection) In 2009, Volkswagen started to sell new car with diesel engine. This is the beginning of VW emissions scandal.

All of the cars in United States need to pass emission testing from Environmental Protection Agency or EPA. The testing relates to Clean Air Act that conducted as legal basis to make sure automakers follow the regulation. In car industry, two major engines produce high level of pollution, especially diesel. Diesel engine is reliable and fuel efficiency, but not good for reducing pollution.

That’s interesting part in Volkswagen emissions scandal. Vehicle was able to pass due to defeat device. It is still under investigation to know how program work in the car. To put in simple explanation, this program was like anti-malware. When emission is at below level, the program is not active. After emission is passed standard level, the program initiates to terminate the numbers into more appropriate level. When testing only relies on car software and computer, you cannot predict the reliability. To test the car, you need third party equipment.

Moreover, the car was being tested in two ways. Firstly, the car will get treatment in closed environment or laboratory then take data of emission component. After that, the car would undergo open road testing which is very crucial. How did diesel engine pass testing? When the car was in laboratory, there was nothing wrong due to static condition. On contrary, the car turned into different response when people drove on the road. Emission level increased significantly more than thirty times, even reached forty times.

Testing was conducted by EPA and California Air Resources Board. How much emission is allowed for diesel engine? Based on EPA, the car has to meet emission below 0.043 gr/km. The number is very low since diesel emits dangerous pollution. Comparison between petrol and diesel shows the contrast result. This is the reason why diesel is only available in bigger vehicle. Trucks are common with diesel due to long journey. Moreover, trucks are less than sedan or crossover vehicles.

In Volkswagen emissions scandal, the vehicles reach emission level more than 0.5 gr/km. That is very far away from normal state. It is more than ten times higher and it violates many things. Violation was noticed in 2015, but EPA assumed Volkswagen puts this defeat device since 2009. Nowadays, the car is fully equipped with digital and computer. Analyst predicted that Volkswagen implemented this kind of software in another brand. For your information, Volkswagen acquired many brands, including Audi. This company is the top three in car industry. The rivals are Mercedes and BMW, even Toyota has difficulty to catch with capacity and sales of Volkswagen.

Market effects of Volkswagen Emissions scandal

At first place, the company did not admit this violation. Technical issue was their reason not to put Volkswagen emissions scandal into major area. However, this problem was not just technical glitch in one car. EPA found many vehicles with emission level far more standard level. The bad side is the car had Volkswagen nameplate. After that, company admitted that certain devices and software were installed in the car. However, they did said directly about what kind of software that leads to pass emission testing.

1. Recalled
When automaker finds defection in their products, recalled is what they need to do. The car should be put back into factory. After CEO of Volkswagen announced sincerely apology to customers and regulator, company decided to recall every car that being the part of violation. As you know, Volkswagen only took the car from United Stated market. However, Europe market started to react with Volkswagen emissions scandal, especially German and UK. More than eight millions cars were recalled from Europe countries such as German, Belgium, Italy, Portugal, and UK.

2. Investigation in other countries
First investigation was conducted in United States. Several countries wanted to make sure that Volkswagen’s vehicle did not violate their own regulation. India and Australia instructed to investigate Volkswagen emissions scandal. There was possibility that this problem happened in their countries. Besides, several countries also conducted investigation such as South Korea and Japan. International market started to put on hold VW stock. The effect of this condition was very terrible. Company stock fell into third level of previous basis.

3. Reviewing Volkswagen cars
Audi is a part of Volkswagen and it is found in distressed situation. Even though VW did not control production of subdivision brands, those vehicles were still under investigation. It might be possible to exchange technology that delivered similar defeat device. Of course, petrol and diesel engines are different. As the response to Volkswagen emissions scandal, some brands under VW will undergo strict inspection to assure the emission level.

4. Compensation
The last resort is about compensation for externalities. Company decided to recall and offered compensation for customers. This matter brought into big sum of money. The company spends $7,3 billion to overcome this issue then adds more money until reach $18,32 billion.

This problem leads to awareness of emission level. Regulator needs to find a way to test the car with digital system. Computer turns into latent device as blade. The car from prominent automaker does not guarantee to meet emission level. Testing should be conducted with more than two methods. Moreover, independent testing is required to prevent market conflict.

Well, diesel is found in difficult situation due to high-emission level. The cars with this engine seem not good in sales. People act more aware about environmental friendly and dispose diesel. The only key to survive is finding new technology or doing the unfair ways. Volkswagen emissions scandal is good lesson for customers, regulators, and automakers that greatness comes with great effort.

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