Once a bestselling brand the world over, Volkswagen, most notably known for its iconic Volkswagen Bug, continues to experience dramatic sales declines due to an emission inspection scandal that surfaced last September. During that time, the company admitted that it manipulated vehicles that ran on diesel engines to emit less carbon dioxide during emission tests than they would under everyday driving conditions. This admission is considered so serious that the Department of Justice filed a complaint on Monday alleging that Volkswagen had violated the Clean Air Act.
According to WSOC-TV, the company’s sales have dropped 4.8 percent worldwide. This is the first time in 13 years that the German-based company has seen this type of decline. Before the cheating scandal, Volkswagen was the second largest automaker in the world, second only to Toyota.
— Amy Harder (@AmyAHarder) January 6, 2016
Wall Street Journal reports that Chief Executive Matthias Muller is trying to put a positive spin on the numbers.
“Delivering almost 10 million vehicles is an excellent result, particularly in view of the continued challenging market situation in some regions as well as the diesel issue in the final quarter of last year.”
— The Straits Times (@STcom) January 8, 2016
Just how was Volkswagen able to pull off such a massive workaround to the emission testing system?
It seems that they installed special software in the brand’s diesel vehicles that allowed the onboard computer to improve the testing numbers to a level that exceeded each vehicle’s accurate testing results. In essence, the vehicle adjusted to perform better on the emission test than it did on the road. This apparently was not limited to just the Volkswagen brand but to every vehicle line: Audi, Seat, Porsche, Skoda, and commercial vehicles. The scandal affects as many as 11 million vehicles.
CNN Money writes that Volkswagen sold 30,000 fewer vehicles the world over in 2015 than it did during the same time period in 2014.
Adding fuel to the fire is the fact that the company will have to recall affected vehicles in the United States market, to the tune of 500,000 cars. Along with this, a whopping 8.5 million will need to be recalled in the European market.
As a public gesture of contrition, Volkswagen has replaced its CEO, and U.S. owners impacted by the scandal have been offered cash payouts amounting to $500 each. Industry experts have not yet been able to accurately speculate whether or not this will be enough to keep the automaker from completely spiraling into destruction.
Volkswagen was founded in 1946, and until this date was the largest-selling line in the Volkswagen Group, its international holding company. It is headquartered in Wolfsburg, Germany. Its three best-selling vehicles were the Volkswagen Golf, the Volkswagen Beetle, and the Volkswagen Passat.
In September, 2015, the United States Environmental Protection Agency accused the automaker of having installed special software in its diesel vehicles since 2008 to circumvent emission testing. This resulted in the affected vehicles emitting 40 times more air pollution than allowable under the law. After pressure from the government, stating that it would not approve the company’s 2016 line of vehicles, Volkswagen later admitted to these allegations. They are currently awaiting substantially stiff federal fines and are the subject of a criminal complaint filed by the Department of Justice.
Volkswagen established a manufacturing presence in the United States in the state of Tennessee in 2011. This facility produces vehicles specifically designed for the North American market. The company recently stated that it planned to expand this facility and intended to earmark $900 million dollars towards the expansion of its floor space.
[AP Photo/Chris Carlson]