Volkswagen Diesel Emissions Scandal: A Comprehensive Analysis

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Analysis
The Environmental Protection Agency or EPA investigated into the issue of Volkswagen
scandal or which is known as the diesel dupe. The Volkswagen cars were being sold in
United States of America which had a defeat device or software in diesel engines which
could help in detection of the performance and could help in improve in the performance, if
required. Eventually, Volkswagen cars are reported to be cheating the market of the United
States (BBC.com, 2019). Volkswagen cars insisted on forcing the sales of the diesel cars in
the United States of America which is enunciated by the marketing campaign which shouted
on the low emissions of diesels fuels out from their cars. The Environmental Protection
Agency found that only 482000 cars are present in the States facing included the German
giant cars like Jetta, Passat, Beetle, Golf and Audi A3 which almost included 8 million in
whole Europe facing a defeat device. This device which is on the basis of the software so as
to modify the tools like valves or catalytic converters which helps in recycling the exhaust
fumes which comes out from the cars (BBC.com, 2019). These tools and elements are meant
to lessen down the pollutants, specifically emissions pollutants like nitrogen oxide which can
highly affect human health likely to cause bronchitis, emphysema and several other
respiratory diseases (Gates et al., 2019). Initially the model of using the technology for the
prevention of the diesel was of two types which is to be done either by trapping the pollutants
or by treating them with urea (Gates et al., 2019). The computer system of the car enables the
system which could save fuel by making the passage so that the pollutant can pass through
the exhaust system. The International Council on Clean Transportation reported that in order
to make the software, it has resulted in the emission of more pollutants, though the main
motto of this company is to save the whole fuel system. Few tests have done to understand
the level of the scandal of the Volkswagen cars (Gates et al., 2019). The testing has been
done on road in the year 2014, May which was initiated by California Air Resources Board
and conducted by the researchers of University of West Virginia. The two liter turbocharged
model of the Volkswagen cars with the 4 cylinder diesel engine was tested. The testing report
showed that the cars are emitting nitrogen oxides forty times more than the permitted level.
Now the Environmental Protection Agency came into force in the year 2015, September
which ordered the company to recollect 7 models of the car with the engines those are
affected vehicles amounted approximately around 6 lakhs (BBC.com, 2019). Majority of

these vehicles are located around Europe which included Seat and Skoda cars which are not
sold in the United States of America. The left amount of vehicles is located around South
America, Asia and Africa, where the cars sold are relatively in a small amount. The car
makers of Germany faked the level of emissions in approximately around 580000 vehicles
which were sold between the year 2006 and 2016. This is used by providing a software
named defeat device which is followed by the laboratory testing on a regular basis but the
practical fact is that the car emitted more fuels that what is permitted according to the
standard. This has led to the execution and resignation of several senior executive officers
and jailing of Winterkorn. Additional checking and research has been done on several other
diesel models of Volkswagen and Audi especially on the Porsche model. EPA formulated
that the company have sold a model over ten thousand cars which are sold in the United
States of America (BBC.com, 2019). Volkswagen had issued bonds of more than thirteen
billion dollars and several back up assets which is in the form of securities in the stock
markets of United States of America. Volkswagen gave a statement to the CNBC deniying
the charges, “The bonds were sold only to sophisticated investors who were not harmed and
received all payments of interest and principal in full and on time.”
(Knowledge.wharton.upenn.edu, 2019) But the meetings of EPA confirmed that all model
since the year 2009, the cars having three liter diesel engines possessed the software as well,
which amounted for more than eighty thousands of such vehicles. This scandal has spread
wide across the countries in the world which included United Kingdom, South Korea, France,
Italy, Canada and obviously Germany. The headquarters are sent into open investigations of
this scandal. The politicians, environmental group, motor regulators are asking about the
validity of the testing of emissions. The rate of sales of diesels is lessening down after this
scandal. The automotive expert at Vendigital consultancy said that the news of the scandal
could definitely cause the fall in the demand of the diesels for the engine cars by the
customer. In the United States of America, cars which are run by diesel engines have fallen
down to merely one per cent which has led to the reduction in the sales value of the
Volkswagen cars but has resulted in the increase of sales value for the other cars in the
market. The car production houses thought of having a fortune delving in to the diesel
vehicles production, thinking of that it is safe for the environment having the support and
backing from the government. Many of the groups and activists of the environment spoke
about the flaws of the emissions. Jos Dings from the Transport and Environment group talked
of huge amount of vehicles on the road. In Europe cars run on diesel is worse than the cars of
the United States of America. The latest report on the diesel run car showed that around

ninety per cent car run by diesel did not achieve and maintained the limit of emissions as is
suggested. Bernstein which is the financial research firm, the car analysts from that firm
responded the standards and rules of the United States are not as strict as the standards and
policies of the Europe. Although the analysts have suggested that there is a less need of
cheating. Bernstein said, “…consequences are likely to be a change in the taste cycle rather
than legal actions and fines.” if other car manufacturers of Europe are suspected. The other
car manufacturing companies either diverted the questions or simply refused to speak on that
matter. The Society of Motor Manufacturers and Traders said that the United States of
America is managed differently by the European Union. The government had appointed the
testing agency and several performance tests are done on the European auto giant
Volkswagen. Presently, the automobile industry believes in the fact that the testing methods
are traditional and obsolete for the new generation mechanical tools. Thus, this industry
wants to take assistance from the European Commission to set up a new and innovative
technological field on the development and improvement of the industry. (BBC.com, 2019)
Grams of Nitrogen oxides per kilometer which has set up to 0.4 grams per kilometer United
States limit.
2011
VW
Jetta
0 0.1 0.2 0.
3
0.
4
0.
5
0.6 0.
7
0.
8
0.
9
1.0 1.
1
1.
2
1.
3
1.4 1.
5
Highwa
ys
15
time
s
limit
Urban
(Los
Angeles
)
25
time
s
limit
Urban
(San
Diego)
37
tim
es
lim
it

Rural
(Up and
Downhi
ll)
3
8
ti
m
es
li
m
it
Source: (BBC.com, 2019)
The German auto giant presented the defective device of the prevention of the emission from
the diesel engine which has led them to go through this serious scandalous issue.
Conclusion
It is still not clear about the settlements of the vehicles scandals. But in the United States of
America the negotiations has been done with the government by the Volkswagen company so
as to buy back the affected vehicles and to compensate the owners due to the misleading
information of the emissions from the car. Hence, the company also agreed on buying around
eighty thousand vehicles with three liters of engines. The company will try to fix a majority
according to the complaint registered as per the standards and borders of the emission.
Although, many of the car owners will be provided with the buyback offers. Volkswagen has
opened a website VWCourtSettlement.com for the owners to register here if they want to sell
their cars back. The agreement was provided in the month of June of the same year, where
the Volkswagen Company complied to buy back the cars and renovate those till December,
2018 (Gates et al., 2019).
Recommendation
The dedication of the Volkswagen Company should be focused on the reestablishment of the
integrity of the organization. The company can rebrand but this is not all in all. The company
can also take into account of several agencies to verify the feasibility, accountability, and
compatibility of the company. The last option could be selling one of the brands of the
company and list a bond, while this is the costliest option and an only option to rely upon
finally (Gps.ucsd.edu, 2019). This may help in making the goodwill of the brand to return to

its condition as it was. A suggestion could be that the amalgamation of both the second and
third option is the best. The sales will generally increase if the customers can revitalize the
trust in the brand. Stakeholders are coming forward to purchase the least price stocks of the
Volkswagen Company, as it is their belief that the company is taking their emergent steps in
curtailing the scar of the scandal (Gps.ucsd.edu, 2019). Though, it is highly out of question
that the price of the share of Volkswagen Company would be high at any time yet it is quite
understandable that the company is highly regretting for the discordance which was caused
due to the scandal. It is being thought that the scandals will mitigated at some point of time
by the company itself and will move towards better practices of CSR which will help in
regain its status in the automobile industry once more. The Volkswagen Company can
renovate the tools of the bought back cars and sell it to the market once more, which will
reduce the cost of production of the organization. This device which is on the basis of the
software so as to modify the tools like valves or catalytic converters which helps in recycling
the exhaust fumes which comes out from the cars. This auto giant must also focus on the
environmental factors, keeping in mind about the cause and effects of any sort of pollutions
from the raw material and even from the produce.

Reference:
Gates, G., Ewing, J., Russell, K., and Watkins, D. (2019). How Volkswagen’s ‘Defeat
Devices’ Worked. Accessed from
https://www.nytimes.com/interactive/2015/business/international/vw-diesel-emissions-
scandal-explained.html
Gps.ucsd.edu (2019). Accessed from
https://gps.ucsd.edu/_files/faculty/gourevitch/gourevitch_cs_zhou.pdf
Volkswagen: The scandal explained. BBC.com (2019). Accessed from
https://www.bbc.com/news/business-34324772
Why the Volkswagen Diesel Scandal Hasn't Gone Away. Knowledge.wharton.upenn.edu
(2019). Accessed from https://knowledge.wharton.upenn.edu/article/volkswagen-diesel-
scandal/