Volkswagen comes undone?
The Volkswagen Beetle (officially the Volkswagen Type 1, informally in Germany the Volkswagen Käfer and in the USA as Volkswagen Bug) is a two-door, four passenger, rear-engined economy car manufactured and marketed by German automaker Volkswagen (VW) from 1938 until 2003. The need for this kind of car, and its functional objectives, were formulated by Adolf Hitler, leader of Nazi Germany, wishing for a cheap, simple car to be mass-produced for the new road network of his country. He contracted Ferdinand Porsche in 1934 to design and build it, after telling him in 1933,
“This is the car for my roads”. This car was the beginning of the legendary Volkswagen brand that is now such a huge auto behemoth that it has a whopping 19.9 percent stake in India’s biggest car manufacturer Maruti Suzuki, although this is set to change quite soon. Suzuki Motor Corp is buying back the 19.9 percent stake held by top shareholder Volkswagen AG for up to $3.9 billion after an international arbitration court last month ordered the German car maker to sell its holding. The Japanese automaker said it would repurchase on Thursday as many as 122.77 million shares at Wednesday’s closing price of 3,842.50 yen per share for up to 471.74 billion yen ($3.9 billion) via the Tokyo Stock Exchange’s off-hours trading system before the market opens.
Given this context, it is no surprise that the Volkswagen scandal has global implications for the Indian automotive industry. The spillover of the Volkswagen cheating scandal in has finally reached Indian shores. After reacting to the scandal rather late and stating prosaically that the situation was being closely monitored, the government has now asked for a probe into possible violation of norms by Volkswagen India which is a subsidiary of Volkswagen AG. The government has asked the Automotive Research Association of India (ARAI) to start an investigation into the matter. Since 2009, Volkswagen had been installing elaborate software in 482,000 “clean diesel” vehicles sold in the US, so that the cars’ pollution controls only worked when being tested for emissions. The rest of the time, the vehicles could freely spew hazardous, smog-forming compounds. Suffice to say, regulators were livid once they caught on.
Last Friday, the United States Environmental Protection Agency announced that Volkswagen had very flagrantly violated the Clean Air Act. Not only did the EPA order the German firm to fix the affected vehicles — which include diesel TDI versions of the Golf, Jetta, Beetle, and Passat — but the agency could end up levying fines as high as $18 billion. The Department of Justice is also contemplating criminal charges. Since 2009, we now know, Volkswagen had been inserting intricate code in its vehicle software that tracked steering and pedal movements. When those movements suggested that the car was being tested for <g data-gr-id="49">nitrogen-oxide</g> emissions in a lab, the car automatically turned its pollution controls on. The rest of the time, the pollution controls switched off. Did Volkswagen do the same with its Indian vehicles to beat Indian emission norms? No one really knows the depth of the scandal is still to be ascertained. What’s more, it is a known fact that Indian emission norms are ineffective at controlling pollution. Delhi is currently the most polluted city in the world. Presently, all vehicles need to undergo a periodic emission check (3 months/ 6 months) at PUC Centres at Fuel Stations and Private Garages which are authorised to check the vehicles.
In addition, transport vehicles need to undergo an annual fitness check carried out by RTOs for emissions, safety and roadworthiness. The objective of reducing pollution not achieved to a large extent by the present system. Some reasons for this are: – Independent centres do not follow rigorous procedures due to inadequate training – Equipment not subjected to periodic calibration by independent authority – Lack of professionalism has led to malpractice – Tracking system of vehicles failing to meet norms non-existent. Will the government do anything other than pay lip-service to the emerging scandal? It remains to be seen.