Emissions testing scandal could sink Volkswagen’s US ambitions

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Source : Emissions testing scandal could sink Volkswagen’s US ambitions

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Volkswagen has worked hard to promote its ‘clean diesels’ within the US

Allegations in which Volkswagen has cheated emissions testing regulations are likely to wreak havoc on the group’s ambitions to conquer the US market

The Volkswagen Group has long harboured high hopes for its sales within the USA, however matching them has proven more challenging than the maker might have wished.

In 2007, This kind of boldly announced in which This kind of likely to attain group-wide US sales of £1 million per year by 2018, in line using a plan to sell an annual 10m vehicles worldwide by the same year.

For a few years, the plan appeared to be on course, with market-specific versions gaining ground against the likes of Toyota, however in recent years the growth has stalled.

The manipulation of emissions testing within the USA – an allegation by the US Environmental Protection Agency in which is usually seemingly uncontested in a statement made by Volkswagen Group boss Martin Winterkorn – is usually an incident in which could torpedo any prospect of producing serious headway in in which market for the foreseeable future.

This kind of is usually especially difficult because This kind of affects VW’s diesel engines. The company has done a great deal of work to boost sales of oil burners within the USA, branding its cars as ‘Clean Diesel’ as well as also trying to break down deep-held beliefs among American consumers in which diesels are excessively dirty.

All in which work as well as also investment have been rendered void with the EPA’s revelation.

What would certainly lead a division of one of the globe’s leading car companies to consider such action? Perhaps This kind of felt under increasing pressure to live up to the grand growth proclamations made by its chiefs in 2007.

Perhaps This kind of’s also an indication of how difficult This kind of is usually for car makers to adhere to ever-more stringent emissions regulations with standard, non-hybrid powertrains.

Winterkorn’s statement in response to the EPA’s claims is usually contrite, as well as also with not bad reason, just for This kind of scandal also risks affecting Volkswagen’s global reputation, robbing This kind of of consumer trust. As I write This kind of, the firm’s share cost on the Frankfurt stock exchange has plunged.

Recovery will be a painful process in which its rivals – including Toyota with its involvement in Takata’s defective airbag recall as well as also General Motors with its faulty ignition switch scandal – know all too well.

The EPA is usually talking about hefty fines on Volkswagen. However, while any financial penalties will be hard to swallow, as will the attendant losses in terms of car recalls as well as also sales, This kind of is usually the loss of confidence through consumers in which will hit This kind of hardest, as well as also for longest.

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