dieselgate darkens

VW Scandal At Risk of Widening

VW engine dark patrick pleul dpa
The recall will affect millions of diesel engines.
  • Why it matters

    Why it matters

    The recall process is likely to cost Volkswagen billions of euros and take much longer than thought.

  • Facts


    • In September, Volkswagen was caught rigging its diesel engines to perform more efficiently in tests.
    • It is now recalling more than 11 million cars worldwide to remove the so-called “defeat devices.”
    • Originally only one engine type was thought to be involved, but now it seems others were fitted with the fraudulent software.
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VW’s diesel emissions-rigging scandal looked set to widen on Thursday as the company said it was checking whether it had fitted fraudulent software into early versions of a second engine.

So far, the company has admitted only that its EA189 engine, built into 11 million diesel cars worldwide, was affected. But it emerged on Thursday that earlier versions of the successor engine, the EA288, may also have been equipped with the device to cheat emissions tests. 

A spokesman for the automaker told the dpa news agency that VW was investigating the initial version of the EA288 engine that was based on the Euro 5 European emissions standard. “We’re in the process of taking a close look at that,” the spokesman said. He could not say how many engines might be affected. So far, the German Federal Motor Transport Authority has only ruled that EA288 engines based on the later Euro 6 emissions standard might be affected.

The EA288 was introduced in 2012, initially in line with Euro 5, and was also sold in Germany, for example in the Golf, VW’s top seller. The automaker then gradually switched to the Euro 6 version. Details on the timing of that transition were not immediately available. Since last month, VW dealerships only have Euro 6 engines on their lots.

VW has so far consistently stressed that the “current diesel engine generation EA288 isn’t affected.” But it did not make a specific statement about the Euro 5 version of the EA288.

“The combination of sales, cheap financing and new models is the key for sales to continue.”

VW Supervisory Board Member

The finding could compound VW’s difficulties. Even ignoring the EA288, the automaker is preparing the most expensive recall in motoring history to refit the EA189 engines. Researchers at investment firm Sanford C. Bernstein estimate it will cost €15 billion ($17 billion) to €20 billion. Germany’s Center of Automotive Management said that, including compensation claims and penalties, the total cost to VW may exceed €30 billion.

For the moment, the scandal has not impacted sales. Volkswagen’s overall sales numbers were stable in the first three weeks of October, Handelsblatt has learned from a company source. “There is no dent to be seen,” one source said of the sales figures.

Yet to weather the crisis and keep up steady sales, the German carmaker is having to offer discounts for its major fleet customers and private consumers. Volkswagen Financial Services will have to back the strategy by offering cheap loans.

“The combination of sales, cheap financing and new models is the key for this to continue,” one member of VW’s non-executive supervisory board told Handelsblatt.

The lack of a downturn also poses problems. Without a collapse in sales, it will be tougher for the company to justify letting go of temporary workers – a measure it has planned to limit production of new vehicles in the coming months.


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Meanwhile there are growing doubts about whether VW will be able to keep to the timetable it has set itself for the recall. The message of VW’s new chief executive, Matthias Müller, was clear. “If all goes according to plan, we can start the recall in January. All the cars should be fixed by the end of 2016,” he told Frankfurter Allgemeine Zeitung in an interview on October 6. 

Auto experts said that might be too ambitious. Too many vehicles with different engines, production years and specifications for individual markets are involved. It will involve 8.5 million cars in 28 EU countries.

According to information from company sources and a supplier, about 3 million cars with 1.6-liter engines and about 4.5 million with 2.0-liter engines are affected. The rest are the small 1.2-liter three-cylinder engines. These are figures that have not been publicly known so far – probably because in light of the affected engine types, the time frame for the upcoming recall had to be scrutinized. Volkswagen declined to comment on these details.

The three million cars with 1.6-liter engines are the biggest problem. As VW has always emphasized, for the other cars a software update should be sufficient for complying with the limits on nitrogen oxide, but the 1.6-liter engines would require technical alterations to the actual hardware.

While the software update can actually start according to plan in January, the conversion of the affected 1.6-liter TDI engines will likely not begin until September 2016. That’s because important components must first be ordered from suppliers. The technical solutions are currently being worked out and are then expected to be approved in November by the Federal Motor Transport Authority. Only then will suppliers be able to start producing the parts.

The problem with the 1.6-liter engine is that its catalytic converter is too small to capture enough nitrogen oxide particles. Experts said a bigger system may be needed.

Simple math shows that in order to remain true to the plan, 25,000 cars per day between the North Cape and Sicily will have to be refitted.

But what if there’s not enough room in the engine for that? “Then we must make room, if necessary we will rebuild it,” said Mr. Müller, the chief executive, in an interview with the Frankfurter Allgemeine Zeiting newspaper.

The engines in question were installed in cars not just with the VW brand, but also in Audis, Seats, Skodas and also light commercial vehicles. They were designed differently according to the vehicle and the market. And the retrofitting will differ depending on whether or not the car was a gear-shift or automatic. So there is no standard solution.

Handelsblatt has learned that there were three suppliers of the original catalytic converters, which proved to be too small, but Continental was the main one. The recall will not start before September 2016 because the detailed answers to the problems are still pending, and the suppliers cannot produce yet.

That will leave 120 days to fulfill the promise of repairing all cars in the calendar year 2016. Simple math shows that in order to remain true to the plan, 25,000 cars per day between the North Cape and Sicily will have to be refitted. That’s an extremely difficult undertaking not just in terms of logistics. Experts assume it will take at least five hours of work time to convert one 1.6-liter engine.


Christian Schnell is an editor with Handelsblatt, covering the stock market and German auto industry. To contact the author: schnell@handelsblatt.com

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