Scandal deepens for Nissan and VW

By Ben Chu Time of article published May 17, 2016

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Seoul - Global carmakers were hit with a double blow on Monday as Nissan was dragged into the emissions cheating scandal and Norway's sovereign wealth fund said it was planning to sue Volkswagen in the German courts over the fraud.

South Korea's environment agency announced it had found that Nissan had used a “defeat” device for its Qashqai and said it would suspend sales of the model in the country and order a recall of 800 vehicles sold since last November. Nissan denied manipulating emissions data and pointed out that European Union tests had previously given its vehicles a clean bill of health.

“Nissan does not manipulate data related to our vehicles. Nissan has not and does not employ illegal defeat or cheat devices in any of the cars that we make,” a company spokesman said in a statement.

But in a potentially worrying development for the UK car manufacturing industry, the Japanese carmaker did say that the vehicles in question were built at its Sunderland plant.

And the charge comes after Nissan's partner, Mitsubishi Motors, was sucked into the scandal in Japan after disclosing that some employees had been overstating fuel efficiency by up to 10 percent in four types of petrol-powered car. Last week, Nissan agreed to acquire a 34 percent stake in Mitsubishi. In turn, Nissan is 43 percent owned by France's Renault.

Volkswagen sued in Norway

Last September, Volkswagen admitted to cheating emissions tests in the US in all its models, with up to 11 million cars affected. “We have been advised by our lawyers that the company's conduct gives rise to legal claims under German law. As an investor it is our responsibility to safeguard the fund's holding in Volkswagen,” said Peter Johnsen, of the Norwegian wealth fund, which has a 1.64 per cent stake in the German car marker.

VW shares are down almost a quarter since the scandal first broke eight months ago. “Volkswagen management should have known about the manipulative engine-management devices,” said Mr Johnsen.

This follows notice of a host of lawsuits against VW around the world by institutional investors.

VW is also being sued by the US Department of Justice and the Federal Trade Commission. It has made 16 billion euro (R282bn) in provisions for the anticipated legal damage.

Qashqai fails test

Hong Dong-kon, a director at South Korea's environment ministry, said on Monday that his department had investigated 20 diesel models in the wake of the VW scandal and that only the Nissan Qashqai had failed the test.

“Usually, some cars turn off the emission reduction device when the temperature reaches 50 degrees Celsius, to prevent the engine from overheating. The Qashqai was the only vehicle that turned it off at 35 degrees” he said. Seoul is suing Nissan for 330 million Korean won (R4.3m) for manipulating the data.

Nissan began production of the Qashqai in Sunderland in 2006 and is one of Nissan's best-selling cars. Nissan recently celebrated selling more Qashqais than any other car in 30 years of manufacturing in Europe. A fifth of the Qashqais built in Sunderland are sold in the UK with the rest going abroad.

David Bailey of Aston University said: “This could be very damaging for Nissan - the Qashqai is one of its most popular cars and is often jokingly called the 'cash cow' for the company.”

The Independent

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