The truck entry area at the sprawling Volkswagen factory in Wolfsburg is eerily quiet. Instead of dozens of car carriers waiting to get in, there are only three trucks to load up cars for delivery. The factory shuts down on Fridays, and sometimes on Mondays.
Low customer demand isn’t slowing production at VW, mismanagement at the top is. The world’s biggest carmaker is woefully behind getting its models approved under new, tougher pollution testing designed to mimic the real use of the vehicles.
The ultimate irony is, of course, that VW itself is responsible for the new testing after the 2015 discovery of its emissions-cheating devices on diesel cars created a global scandal and led to demands for better testing.
Few models certified
The worldwide harmonized light vehicles testing procedure, or WLTP, goes into effect Saturday. EU carmakers cannot manufacture any vehicle that hasn’t passed this test. Only seven of VW’s 14 models have the new registration certificate, and that doesn’t cover all model variations.
Some Passat and Touareg models are certified, but big sellers like Golf and Tiguan have yet to win certification. This has led to the shift closures not only in Wolfsburg but at places like the Polo factory in Navarra, Spain.
Other carmakers somehow managed to meet the certification deadline. VW rival Opel said all its models will be certified and available, and Opel parent PSA of France likewise has all of its Peugeot and Citroën models ready to go.
Hundreds of Mercedes and BMW models are on the list compiled by the ADAC automobile club of cars that have passed the WLTP test. VW has only nine.
Hoping to catch up
VW hopes to make up for lost time quickly. Golf and Tiguan models should be certified in the coming days or weeks, executive board member Thomas Zahn, the head of marketing in Germany, said Thursday. Industry sources said 70 percent of the VW models should be approved by the end of September.
VW blames the Dieselgate scandal for the delay, saying all of its engineers were busy retrofitting vehicles with new software to resolve the emissions issue. There just weren’t enough people left to focus on WLTP.
The factory shutdowns and delays in customer deliveries could cost VW a billion euros in operating earnings in a worst-case scenario, though the company hopes to do better than that. Some analysts agree. “The whole thing is manageable,” said Arndt Ellinghorst, who covers the automobile sector for Evercore ISI.
The company plans to put on extra shifts to make up for the lost production, in the hopes that a strong fourth quarter can offset the declines in the current period.
In the meantime, customers should get used to the idea they may not get exactly the model they ordered. “The model you have chosen may differ in terms of technical features and equipment on delivery after the model year change,” VW recently warned customers, citing the new approval procedure.
Stefan Menzel covers Volkswagen for Handelsblatt. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the author: firstname.lastname@example.org.