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Diesel Gate

Utsav AgrawalVaibhav ChawlaViswak Aanur GanapathiSooraj Edayattu Manoharan

HTW Berlin- Automotive Management 1 - WS 2015/16

Introduction

• What ?• How ?• Why ?• When ?• Where ?• Who ?

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Brands Affected

Source : Volkswagen Interim Report Oct 28, 2015

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The TDI League

League 2.0 League 3.0

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1973

1995

• Temperature sensing switches which cut out pollution controls at lower temperature.

• 25000 vehicles.• Fined for Violation of Clean air act • Paid 120,000$ without admitting

wrongdoing

• Circumventing Pollution controls• 470,000 Cadillac sedans with 4.9 Liter

V8 engines.• Pollution controls turned off when

Air-conditioning is turned ON.• 45 million $

History

Source : Forbes.com

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2005Adopted Daimler Ad-blu

2006Hint of entry into US Diesel Market

2007Audi launches its Diesel in U.S Detroit Motor Show.

2008VW Jetta 2009 Clean Diesel TDI

2009- Audi A3 2010 Clean Diesel TDI

Evolution

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2013-14

John German Peter Mock

JRC Europe identified on road emissions to exceed 4 to 7 times Euro standards

Source : WVU_LDDV_in-use_ICCT_Report_Final_may2014

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Dr .Gregory J ThompsonMr. Marc C. BeschMr. Daniel K CarderMr. Arvind Thiruvengadam

2014

• May- communicated the result of study to US-EPA & CARB.

• Dec 2014 – VW agreed upon for a recall

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2015

April 2015 Emission Service Action letters to customers

September 2015

September 2015- Volkswagen Deception exposed

Source : US-EPA

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Technology Manipulation

Lean Fuel Mixture – On road

Rich Fuel Mixture – On test platform

Source: jalopnik.com

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Type Approval

Source : US-EPA

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Real World Emission

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Possible Solutions

• Reprogrammed software

• Larger NOx trap

• Selective Catalyst Reduction

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The Ripple Effect

Source : Volkswagen Interim Report Oct 28, 2015

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Top Management Restructure

Sep 23rd Sep 25th

Source : Volkswagenag.com

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The New BoardDr. Herbert DiessChairman of the Board of Management of the Volkswagen Passenger Cars brand

Dr. rer. pol. h. c. Francisco Javier Garcia SanzFunctional Responsibility'Procurement'

Prof. Dr. rer. pol. Dr.-Ing. E. h. Jochem HeizmannFunctional Responsibility'China'

Prof. h. c. Dr. rer. pol. Horst NeumannFunctional Responsibility'Human Resources and Organization'

Andreas RenschlerFunctional Responsibility'Commercial Vehicles'

Prof. Rupert StadlerChairman of the Board ofManagement of Audi AG

Frank WitterFunctional Responsibility'Finance and Controlling'

 

 

Source : Volkswagenag.com

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• Commissioned Jones Day- A U.S Based law firm from October 1st

• Actions against responsible department heads

Mr Frank Tuch – Head of Quality ControlMr Richard Dorenkamp- Head of Technical Development low emission engines.Mr Falko Rudolph- Head of development of diesel enginesMr Ulrich Hackenberg, Audi management board memberMr Wolfgang Hatz, Porsche’s management boardMr Heinz-Jakob Neusser, Management board member of VW

• Ms Christine Hohmann-Dennhardt as new board member for Integrity and Legal Affairs from Jan 2016

Management Actions

Source : Reuters.com

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Measures

Source : Bloomberg

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Source : Newyork times

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The Bear or the Bull ?

Source : Credit Suisse/

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Expensive !

900 million

1.2 billion

?

Source : http://fortune.com/2015/09/26/auto-industry-scandals/

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Market Capitalization

Source : Yahoo finance

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Competitors

Source : Yahoo finance

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German Engineering

Source : Yahoo finance

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Major Shareholder

Source : Yahoo finance

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Rescinded

Source : AutoBlog.com

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Profit or Values

Source: Telegraph.co.uk

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Poor Decisions ?

NOX control technologies for Euro 6 Diesel passenger cars – ICCT – Sep 2015 + Own Illustration

Vs37500$ / Car

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Lee Iacocca

• Publicize the issue and state of the company.

• Information Penetration Back and forth

Source: Lee Iacocca & Chrysler Rescue

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References• http://www.volkswagenag.com/content/vwcorp/info_center/en/news/2015/09/VW_Kaluga.html• http://

www.reuters.com/article/2015/09/24/us-usa-volkswagen-letters-exclusive-idUSKCN0RO0BD20150924#5AL1tMWG1uPWmMr6.97

• http://www.bloombergview.com/articles/2015-09-23/volkswagen-and-the-epa-s-dirty-little-secret• http://

jalopnik.com/understanding-the-test-mode-that-let-vw-trick-the-emiss-1732175835?sidebar_promotions_icons=testingon&utm_expid=66866090-67.e9PWeE2DSnKObFD7vNEoqg.2

• http://www.theguardian.com/business/2015/oct/16/volkswagen-market-share-declines-in-september• http://www.forbes.com/sites/dalebuss/2012/09/18/volkswagen-grows-up-with-new-why-vw-marketing-

campaign/

• http://www.cnbc.com/2015/10/15/watchdog-orders-vw-to-recall-24m-vehicles-report.html• http://www.bbc.com/news/business-34536573• http://arstechnica.com/cars/2015/10/volkswagens-emissions-cheating-scandal-has-a-long-complicated-h

istory/

• http://www.independent.co.uk/news/business/analysis-and-features/volkswagen-emissions-scandal-forty-years-of-greenwashing-the-well-travelled-road-taken-by-vw-10516209.html

• http://fortune.com/2015/09/26/auto-industry-scandals/• www.forbes.com• www.telegrapgh.co.uk

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