Volkswagen Scandal Spreads; BMW Under Fire

Volkswagen Scandal Spreads; BMW Under Fire

The emissions scandal from Volkswagen is starting to affect other car companies, as BMW has been threatened by the repercussions. The European Union has asked all 28 of its member countries to conduct investigations of their own.

EU spokesperson Lucia Caudet said, “We are inviting all member states to carry out investigations at the national level. We need to have the full picture whether and how many vehicles certified in the EU were equipped with defeat devices.”

The transport ministry of Germany said that spot checks of vehicles would go beyond Volkswagen. Meanwhile, shares of BMW took a dive with reports that a diesel version of its X3 sport SUV produced pollution more than 11 times the European limit in a recent road test.

Volkswagen’s cheating device has brought the entire automotive industry into heavy scrutiny. The public is particularly outraged that a product marketed as “clean diesel” utilized software for the sole purpose of cheating emission tests.

The lobbyist group representing European automotive companies, the ACEA, said that evidence does not exist that the issue extends beyond Volkswagen.

As for Volkswagen, the expectation throughout the industry is that virtually every top official within the company will lose their job. Martin Winterkorn has already resigned as CEO.

Meanwhile, local prosecutors are starting a criminal investigation.

The financial rating company Standard & Poor’s is considering Volkswagen’s long-term financial rating.

A study from last October by the International Council on Clean Transportation found that emissions measured during road tests of 15 newly released diesel cars averaged about seven times greater than limits mandated in Europe. This suggests that there exists an industry-wide problem.

The ICCT also discovered a discrepancy between road testing and lab performance in the X3 from BMW. However, BMW claims that it does not have any cheating devices installed in its vehicles.

A statement from BMW said, “The BMW Group does not manipulate or rig any emissions tests. We observe the legal requirements in each country.”
However, shares for BMW fell 7% to 74.20 Euros in Frankfurt. Meanwhile, fellow car company Daimler decreased by 5.8%.

Whether or not any company outside of Volkswagen did anything illegal, it is clear that the entire auto industry has been affected. The public will also have a difficult time being sold on “clean diesel” in the future.

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