More Volkswagen fallout likely; BMW denies cheating on emissions tests

25 Sep 2015 | Author: | No comments yet »

BMW Shares Recover in U.S. After Magazine Clarifies Report.

BMW AG jumped in U.S. trading after German magazine Auto Bild said it has no indication the carmaker manipulated emissions tests, clarifying its earlier report on the X3 sport utility vehicle. Berlin: The diesel-cheating affair that toppled Volkswagen AG’s chief executive officer deepened as Germany announced plans to widen its investigation and the scandal threatened to ensnare rival BMW AG.AutoBild said road testing of the X3 diesel by the International Council on Clean Transportation — the same group whose tip-off led US regulators to investigate the VW cheating scandal — found it belched out “11.88 times the Euro 6 limit for NOx emissions”. “When it comes to our vehicles, there is no difference in the treatment of exhaust emissions whether they are on rollers (eg test bench situation) or on the road.” BMW says the two studies carried out by the International Council on Clean Transportation have confirmed that the BMW X5 and 13 other BMW vehicles tested did comply with the legal requirements concerning diesel emissions. “We are not familiar with the test mentioned by AutoBild concerning the emissions of a BMW X3 during a road test.Shares in the top-of-the-range carmaker BMW fell nearly 10 per cent on the Frankfurt stock exchange on Thursday on a newspaper report that one of its diesel models exceeded EU emission norms.FRANKFURT: Volkswagen readied on Thursday (Sep 24) to announce a new chief as the scandal over its rigged emissions tests showed no signs of slowing down, with the EU calling for national investigations and the US saying it was taking the scam’s alleged health implications “very seriously”.

Volkswagen has admitted it designed cars to cheat pollution tests, but the trouble with diesel emissions probably goes beyond just one automaker, according to tests of other manufacturers. Road tests of more than a dozen popular models from several manufacturers showed that the raw nitrogen oxide emissions from the cars were on average seven times European standards, according to a little-noticed October report from the same outfit that flagged the VW problems.

German Transport Minister Alexander Dobrindt said that spot checks of vehicles would not be limited to VW. “There’s no suggestion BMW has done anything illegal. The BMW results follow the Volkswagen scandal this week which saw the German company admit there was software designed to “cheat” strict emissions tests fitted to more than 11 million diesel cars sold globally.

Even if there were no signs that BMW had also used sophisticated softwares as Volkswagen to fool pollution tests, the news further destabilised the vital German industry already shaken by the VW bombshell. By contrast, VW shares shot up 7.9 per cent to hit an intraday high of 120.30 euros, as investors went bargain hunting following the meltdown in the share price earlier this week as the extent of the scandal became apparent. The scandal, which emerged last Friday when US officials publicly accused Volkswagen of cheating and launched a probe, has reverberated around the world and sent the company’s share price plummeting.

The entire auto industry and the methods used for testing vehicles are coming under scrutiny following revelations that VW’s “clean diesel” cars have software intended to defeat emissions tests. Meanwhile, the AFP reported that European stock markets closed lower Thursday following another volatile day of trading, as a spreading Volkswagen scandal offset positive German data.

With suspicions spreading to other car manufacturers, the European Union urged its 28 member states to investigate whether vehicles in their countries comply with European pollution rules. “The (European) Commission calls on national authorities to look into the implications for vehicles sold in Europe and ensure that EU pollutant emission standards are scrupulously respected,” a statement from EU Industry Commissioner Elzbieta Bienkowska said. “Our message is clear: zero tolerance on fraud and rigorous compliance with EU rules,” said Bienkowska. Investors were also awaiting an update on the outlook for US interest rates, with the euro up against the dollar ahead of a speech later in the day from Federal Reserve chief Janet Yellen. In Britain, Transport Secretary Patrick McLoughlin said new checks would be carried out across the automobile industry to ensure that the “unacceptable actions” at Volkswagen were not repeated. Volkswagen chief executive Martin Winterkorn resigned this week, and with multiple investigations of the company underway, more executives are expected to depart.

For scientists who specialize in studying auto pollution, the attention in recent days culminates years of mounting suspicions that many diesel vehicles are emitting more pollution than the governmental lab tests seem to indicate. Their suspicions were aroused because, while emissions standards for cars have been growing more stringent in Europe, where diesel cars are far more popular, scientists were not seeing parallel improvements in urban air quality. In response to the cheating revelations, investors dumped Volkswagen shares on Monday and Tuesday, sending it into 35-per cent meltdown and wiping €25 billion (US$28 billion) off the company’s market. Nick Molden, chief executive of Emissions Analytics, a British firm, said that in recent years, Europe had put in place two new standards for tailpipe emissions, each one stricter than before. “But there was no improvement in air quality,” Molden said. “That was the alarm bell. These results suddenly explained why every major European city has an air quality problem.” In those tests, the car tires run on rollers known as dynamometers.

Most of the cars emitted nitrogen oxides — or NOx — at rates several times the European standard. “This report presents strong evidence of a real-world NOx compliance issue . . . both for European Union and U.S. test vehicles,” according to the October white paper from the group. As questions grow over how Volkswagen may have carried out such a large-scale scam, the world’s biggest auto-manufacturer by sales is seeking a chief executive to steer it through the difficult terrain ahead.

Other BMW models had performed very well. “We find that each manufacturer has good ones and bad ones,” Molden said. “People have to be very careful about leaping to conclusions about a company based on one bad test.” “Some degree of excess NOx emissions is likely to be a widespread problem for diesels, but I would be surprised if other automakers cheated the way VW has,” said John M. With the so-called “defeat device” deactivated, the car can spew pollutant gases into the air, including nitrogen oxide, in amounts as much as 40 times higher than emissions standards, said the Environmental Protection Agency.

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