VW boss to visit US, won’t kneel down

Published Jan 8, 2016

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Detroit, Michigan - When the world's leading carmakers unveil glitzy new models at the Detroit auto show next week, Volkswagen's chief executive Matthias Mueller will be in town on a less glamorous mission.

In his first US visit since American regulators said VW cheated on pollution tests, Mueller will apologise for a scandal that plunged it into the deepest crisis of its history and could cost billions in fines, recalls and class-action lawsuits.

At a press conference in December Mueller said he would apologise, but “also look forward with optimism and confidence.”

“Will I be kneeling down? I don't think so,” he said.

Mistakes “will be investigated and we will make sure they will never happen again,” Mueller added, stressing that Volkswagen “will be realigned for a new and successful future, including in the United States”.

Volkswagen has captured just three percent of US auto sales and had been counting on a major expansion in North America to achieve its now-shelved goal of overtaking Toyota to become the world's largest automaker.

Mueller will make an appearance at a media reception in Detroit on Sunday, but Volkswagen said no other public events were scheduled for the embattled chief executive.

Eric Lyman, vice president of industry insights at car-buying site TrueCar, commented: “There is certainly a Volkswagen apology tour going on at the auto shows - and I certainly expect there will be some sort of reference made at Detroit to the incident.”

USA to sue Volkswagen for billions

The Volkswagen group admits it installed emission-cheating software in about 11 million cars of its VW, Audi, SEAT and Skoda brands worldwide.

The so-called defeat devices were designed to turn on pollution controls when the car was undergoing testing, and turn them off when the car was back on the road, allowing it to spew out up to 40 times the legal limit of nitrogen oxide.

The affair severely damaged the image of Volkswagen, which is currently facing a host of different investigations in several countries.

On Monday, the US government sued the carmaker for installing defeat devices on nearly 600 000 of its VW, Audi and Porsche vehicles sold in America between 2009 and 2015.

The Justice Department did not name the specific overall penalty it was seeking, but the figure could run well above $20 billion (R320 billion), with some media reports suggesting fines as high as $90 billion (R1450 billion).

Mueller, who was appointed head of Volkswagen after the scandal broke in mid-September, said it was too early to assess the costs, stressing that “every estimate would be too vague”.

He insisted his company did not engage in criminal behaviour.

“Criminal means for me that people enrich themselves and deliberately harm somebody else. No one at our place has done that.”

Mueller added that Volkswagen now faced 650 class-action suits of disgruntled customers in the US.

VW struggling to agree on fix for TDI cars

Volkswagen's US sales dropped nine percent in December and were down five percent overall in 2015, but analysts cautioned that this was in large part because it stopped selling its diesel cars.

Edmunds.com analyst Jessica Caldwell said: “We're seeing Volkswagen sales not being great because they can't sell a lot of their vehicles.

“The ones they can sell are selling quicker than the industry average by a significant measure.”

Kelley Blue Book analyst Jack Nerad agreed that “this has not been a complete disaster” for VW.

“It's probably shaken some Volkswagen fans' faith in the brand, but others are probably saying, let's see what the fix is and what they offer me and we can potentially move on from there.”

Mueller will fly from Detroit to Washington, where he will meet Environmental Protection Agency administrator Gina McCarthy.

The environmental regulator has voiced dissatisfaction over protracted recall discussions and said the meeting was requested by the German automaker.

Stricter anti-pollution regulations make it much harder for Volkswagen to come up with a technical fix in the United States than in Europe.

Lyman said: “If we don't see this fix coming soon, then we would expect a secondary apology being that it's taking so long, and I don't think they want to get to the point where they have to apologise for two things at once.”

Volkswagen expects it will have to buy back about 115 000 cars from American customers while the rest of the vehicles will need major refits to comply with US emission laws.

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