VW recalls previously sold, non-road legal prototype vehicles

Stefan Menzel, Martin Murphy, Dietmar Neuerer and Volker Votsmeier, writing for Handelsblatt:

“From 2006 to 2018, Volkswagen sold around 6,700 test cars in Europe and the US, a VW spokesman said, confirming German media reports. Around 4,000 were sold in Germany and the remainder in the rest of Europe or North America.

The cars, made to test and showcase new models before the launch of large-scale series production, should officially have been scrapped, but instead VW sold them as new or second-hand cars. The problem: motor transport authorities never approved these test models, only the ones produced in series.

Some models only needed a software update or a new navigation system to make them compliant, but others were so different from production cars, their only destination would be the scrap yard. VW explained that potential safety issues were the reason for the recall.

The matter has been deemed a serious offense by local authorities and the German Transport Ministry is deciding whether to fine VW a couple of thousand euros per test vehicle sold. Legal experts said VW may also face lawsuits, because consumers bought cars which may not have met the criteria the carmaker promised. 

VW's own dealers are also angry. "Yet again we have to compensate the customer for damages that actually originated in Wolfsburg," said one car seller in southern Germany.”

This is, frankly, appalling. It’s unbelievable that one of the world’s largest car companies had, for 12 years (!!), no way of clearly distinguishing prototype and pre-production vehicles from production cars.

From a company as established as Volkswagen, it’s obvious for the customer to expect a certain standard of quality and a guarantee that the car will perform as marketed. Thus, having a potential range of issues as broad as simply needing a software update, to poor quality or non-compliant parts, likely worsens the situation for the customer by creating an additional air of uncertainty about the potential safety risk of the vehicle they’re driving. It appears that the customer has no further knowledge about whether their car might require a software update or substantial structural repairs/replacing.

As Volkswagen franchisees, this news will also have an adverse impact from a dealership point of view. Dealerships are typically the first port of call for the customer. Not only will they be responsible for providing compensation (hopefully VW corporate compensates them back) and going through the expense of organising, handling and repairing/replacing affected cars, but they will also share some of the ‘bad blood’ generated from this scandal through no direct fault of their own.

For Volkswagen itself, this episode further drags VW’s brand reputation through the mud, compounding problems for a company still reeling from the ‘Dieselgate’ saga. Whilst 7,000 or so cars over a 12 year period may seem minuscule compared to the millions of cars that the VW group sells annually, this news is sure to have an outsize impact on the brand’s previously heralded reputation for quality and safety.

Follow-up: VW to seek partnerships rather than use Audi to develop electric and autonomous vehicles

Edward Taylor and Jan Schwartz, reporting for Reuters (from Automotive News Europe):

“Volkswagen…will explore potential alliances with Ford and others to develop autonomous and electric vehicles. If approved by the board, it would signal a major departure from VW's standalone efforts to build them and diminish Audi's importance as an engineering hub.

The strategy could also deepen existing cooperation with Ford. This could include Ford supplying a pickup platform and some engines to VW, one of the sources said. VW could also buy a stake in Ford's autonomous cars program and give Ford access to its MEB electric cars platform, they said.

Audi has been developing autonomous technology for VW, Audi and Porsche. It built the A8, a car with advanced self-driving features, but its efforts for a fully autonomous car have fallen behind rival companies such as Alphabet's Waymo.

"We want to have access to a self-driving system and we are speaking with relevant players. It is very expensive to develop and others are already well advanced," Chief Financial Officer Frank Witter said in a phone call with reporters on Tuesday.

This ultimately isn’t surprising, and affirms my comments regarding yesterday’s article. Today, the automotive industry is fragmented, and consists of a number of key players, ranging from both traditional automotive manufacturers to those entering with a Silicon Valley mindset. As a result, there is little logic in every company going in-house, and at great expense, to develop technology that fundamentally aims to achieve the same end goal - a fully autonomous, electric vehicle. In this regard, recently departed Fiat-Chrysler CEO Sergio Marchionne’s comments are prescient:

“Auto companies need to quickly separate the stuff that will be swallowed by commodity from the brand stuff”

In this regard, what matters more is the integration and execution of electric vehicle and autonomous driving technologies, with design and usability into a seamless whole - it is this that will differentiate successful automakers from those that are not. When everyone has access to the same fundamental technologies, it is that final, extra layer of polish that will separate the wheat from the chaff, and an average car from one that is great. Of course, whether that extra polish can be achieved through refinement of available, off-the shelf technologies, or only through an in-house, end-to-end development and ownership of the technology stack within a car, remains to be seen.


Above: The VW brand portfolio. Note that VW Commercial Vehicles is considered to be separate to the ‘main’ VW passenger car brand despite often sharing dealerships and sales channels

Ford and VW reportedly discuss collaborating on autonomous and electric vehicles

Edward Taylor and Ben Klayman, reporting for Reuters:

Volkswagen AG and Ford Motor Co are in “exploratory talks” to jointly develop self-driving and electric vehicles in a far-reaching strategic alliance meant to save the companies billions of dollars, according to a person familiar with the matter.

“Our (memorandum of understanding) with VW covers conversations about potential collaborations across a number of areas. It is premature to share additional details at this time,” Ford spokesman Alan Hall said in an email.

Volkswagen Chief Financial Officer Frank Witter on Tuesday said the carmaker was open to deeper alliances with outside companies, particularly in the area of autonomous driving. 

Witter said sharing the carmaker’s electric cars platform MEB with Ford was theoretically possible, although VW is currently focused on rolling out the electric vehicle technologies among its own brands.

Such a collaboration between the two companies wouldn’t be surprising, and would in all likelihood be beneficial for both parties. From a Volkswagen perspective, the VW brand in particular is weak in North America, especially in light of the damage caused by the ‘Dieselgate’ scandal. Thus, a collaboration could provide access to Ford’s American factories and other resources such as the company’s marketing expertise and dealership network, potentially increasing the presence and sales footprint of the VW brand. From a Ford perspective, the company gains access to VW’s MEB electric vehicle platform and the expertise associated with it; which, in light of the company ceasing sales of passenger vehicles in the U.S. market, could be very beneficial indeed. Indeed, given both companies respective strengths, future Ford electric commercial vehicles built and geared towards the US market, but developed using VW technology, could have strong prospects of success for both companies. Moreover, although Ford recently invested in Argo AI, a self-driving startup, and created a separate division to lead its autonomous vehicle development, neither brand has the same level of expertise in autonomous vehicles that Waymo, Tesla or GM (with its Super Cruise technology) does. As a result, collaborating in this area may help both brands catch-up more quickly to the current industry leaders.

Above: VW’s electric MEB platform, and Ford’s F-150, the best selling vehicle in the U.S. market

Ad Standards ironically bans VW 'too powerful for TV' ad

Abigail Dawson, writing for Mumbrella:

Volkswagen’s “too powerful for TV” ad, which aims to show the power of the Amarok V6 without breaking any advertising codes of conduct, has been deemed as “unsafe” by Ad Standards for depicting “driving which is reckless and would breach road rules”.

Despite particular scenes in the ad being intercepted with a director who demonstrates scenes he would like to film using miniature models, rendering and storyboards, Ad Standards said the ad still depicted a “realistic image of a vehicle in a regional area overtaking a road train”.

How ironic.