The Year Of The Recall

2016 will be the year of the recall with half a million VW cars recalled to have the defeat mechanisms on emissions removed and improvements to emissions installed.

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Professor Mark Johnson at Warwick Business School predicts that, to pay off the £5 billion costs and fines associated with the scandal, VW will sell off some of its premium brands like Bentley and Lamborghini which are not particularly profitable.

In addition to costs and fines there are expected to be heavy liabilities from customers suing for the decline in the value of their cars.

Lawyers representing VW owners say that they have to sell at prices which are significantly lower than they were pre-scandal and that VW should offer VW car-owners a package of financial compensation make up for the loss of value on their cars.

VW car sales in November were 20% down on November 2014.

“They have got it wrong on a number of fronts, especially around customer service,” said Prof Johnson, “VW and Audi, which are probably the two biggest selling brands within that portfolio, they have been able to charge premium prices with the expected premium service. But the way in which they have treated customers means that they are probably not going to get it back in the short-term.”

Meanwhile, rumours swirl around the industry that car manufacturers have been installing other defeat mechanisms beside emissions defeat devices to overcome regulatory standards.


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