Volkswagen temporarily stops sale of Polo in India
BY Agencies8 Oct 2015 11:45 PM GMT
Agencies8 Oct 2015 11:45 PM GMT
Beleaguered German auto major Volkswagen on Wednesday asked its dealers in India to temporarily stop selling its premium hatchback Polo, citing a technical issue, which however is not related to the emission scandal that has hit the firm in the US and Europe.
“Volkswagen India has confirmed a temporary hold on deliveries of its carline Polo due to a technical reason which is currently under evaluation,” a Volkswagen Passenger Cars India spokesperson said in a statement.
This concerns a limited number of cars out of a specific production period, it added. On whether the matter is related to the emission scandal, the spokesperson said: “Volkswagen would like to clarify that the temporary hold on deliveries is not related to the ongoing EA 189 diesel engine topic.”
Earlier in the day, in a letter, signed by Ashish Gupta, Head of After Sales Operations, Volkswagen Passenger Cars and Pankaj Sharma, Head of Sales Operations, sent to the “dealer partners”, the company asked them “not to physically deliver any Polo vehicle (all variants) with immediate effect till further notice from VW.”
VW India produced 20,030 units of Polo in the April-August period this year. It had sold 13,827 units in the domestic market and 6,052 were exported. Earlier this week, the company had said that it is still evaluating the impact of the emission scandal on Indian operations, and a recall of vehicles will depend on findings of the ongoing investigations. The company is in communication with testing agency ARAI, which has been asked by the government to probe if Volkswagen manipulated emission tests in India as it did in the US and Europe.
ARAI has asked Volkswagen India to present the details of all the cars sold in India with the EA189 engine and the firm is in communication with them on the matter. The EA189 diesel engines were fitted with the software that enabled manipulation of emission tests. VW has already announced that globally around 11 million vehicles have been affected. The company faces fine of over $18 billion in the US over the issue.
Last week, ARAI was given time till the end of this month to file a report on the probe by the Ministry of Heavy Industries & Public Enterprises. Meanwhile, Volkswagen’s new CEO has told more than 20,000 workers that overcoming its emissions- rigging scandal will “not happen without pain” and that the company will have to review its investment plans.
Matthias Mueller vowed on Wednesday that “we will overcome this crisis” but said that the company would have to be more careful about costs.
He told the meeting at the company’s sprawling home plant in Wolfsburg, Germany, that the company would have to put its future investments in plants, technology and vehicles “under scrutiny” to spend only what was needed to maintain a leading edge.
“We will do everything to ensure that Volkswagen will stand for good and secure jobs in the future as well,” he told concerned workers. The head of Volkswagen’s influential employee council said later today that the scandal won’t have any immediate effect on jobs. “It is not possible to say today whether and how this wrongdoing could affect our jobs in the medium and long term,” Bernd Osterloh told reporters. But “at the moment ... there are no consequences for jobs,” including those of temporary workers, he added.
Employees at Volkswagen’s German factories at the very least face a possible reduction in their profit-sharing checks. Those under the union contract received 5,900-euro bonuses for <g data-gr-id="68">2014,</g> when the company made <g data-gr-id="67">net</g> profit of 10.8 billion euros. Analysts have been slashing profit forecasts for this year and next.
Volkswagen AG faces fines and lost sales after US environmental regulators found it had installed software that disabled pollution controls when the vehicle was not on the testing stand. The company has set aside $7.3 billion to cover <g data-gr-id="54">costs</g> but analysts say that likely is not enough. Osterloh also acknowledged that recovering from the scandal won’t be painless. But he said the employee council “will watch carefully that this crisis, which was caused by a circle of managers, is not settled on the backs of employees.” “We assume that, for reasons of decency, the management board’s bonus will in case of doubt fall in the same way as the workforce’s bonus,” he said.
Mueller said some of the affected cars - more than 11 million diesel engine vehicles worldwide - could be fixed by adjusting the software, while others would need hardware fixes. He didn’t elaborate. Volkswagen has until tomorrow to give German regulators a binding timetable that sets out when it will have a fix for the cars in the country and by when it can be implemented.
Osterloh said Mueller’s speech went down well with employees, and added that he “can count on the support of employees to put Volkswagen back on the right track.” Moreover, Volkswagen’s new boss said it would take more than a year to fix all its cars fitted with pollution cheating devices, as the German auto giant scrambled to put its biggest crisis behind it.
Matthias Mueller, who took over VW’s reins at the height of the scandal, said four employees had been suspended, although he did not believe top management could have been aware of the deception.
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