Dirty business: VW’s “Dieselgate”


I have to admit, I have been off my blog for nearly a year (my last post was in October). Mainly because I have never got myself round to writing, secondly because I had too many fingers in too many pies, and finally – because there were too many things to talk about and none that I thought about writing about…until last week.

VW Diesel

For those of you who have no idea what so many car nuts are losing their heads about and why the VW Passat unveiling was not over the news (like if it ever would be. A “Passat” is like saying “A4 paper”. It’s the same kind of reaction), Volkswagen Group got into a bit of trouble over their 2.0 litre TDI engines. Volkswagen advertised their engines as being the benchmark for power and efficiency and having exhaust gasses that are cleaner than white clouds in a Summer sky over Iceland. Because of that their new customers all over the world bought loads of cars with these engines in them, around 11 million between 2009 and last Friday, in fact. But now it seems that this number won’t increase for some time. All is because Volkswagen were lying. Not about them being reliable or anything, but that they are actually not as clean as clouds over Iceland. They are actually dirtier than a Smog over London in the 1960s. But why it was unnoticed? Why nobody screamed about it before? Because they couldn’t tell.

THE PROBLEM

Oh if only everybody knew it then

Oh if only everybody knew it then.

They couldn’t tell because VW, being the “Dr. Evil Enterprise” installed a device which basically when engaged turns the cleaning systems in the engine on, making exhausts as clean as advertised in the brochure. This device was programmed to start automatically, when it detects that an emissions test is in progress. After the emissions test is over, this device turns all of the cleansing systems off and the engine burns dirty fuel mixture. And how much dirtier is it? If you’re going to say “twice”, I’d say “don’t be too humble.” Five times? Nope. It emitted BETWEEN 10 TO 40 TIMES OVER THE ALLOWABLE EMISSIONS NORM. So that means if you have a VW Golf, Audi A3, Seat Leon or any other car with a 2.0 litre 4 cylinder Diesel engine and think that you’re actually saving the planet, you’re probably making the air dirtier than a footballer in a 6.0 litre W12 Bentley Continental GT. Maybe even four footballers.

THE INITIAL RESULT

The prime suspect: VW group's 2.0 litre 4-cylinder TDI engine.

The prime suspect: VW group’s 2.0 litre 4-cylinder TDI engine.

Nobody knows exactly who blew the cover first – either United States Environmental Protection Agency (EPA, America’s environment agency who sets the emissions targets and do the testing. They probably don’t feel to well after realising they’ve been fooled right under their eyes) or some automotive company, who, like many others, buy competitors’ cars, disassemble them and see what makes competitors’ cars better. What we do know is that this has been the biggest PR disaster Volkswagen group have ever experienced. Because of that, and because of a very powerful and overly-sensitive nature of an average American consumer, the sales of diesel cars and loads of other VW Group models in the U.S. stopped overnight.

And it’s not like they are going to go and buy them anyway. So Volkswagen, who so far have handled it quite humanly, paid the dealers for diesel cars standing in dealer lots, as they know they will not be selling them anytime soon, if not at all. It has not been specified how much, but I believe it will be enough to keep these dealers afloat for some time, because VW really needs their dealer network now more than ever, as after this scandal it is hard to believe that anyone else will step in to help to sell their cars. VW also told them to stop selling them until the issue will be fully resolved with the EPA.

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Speaking of EPA, Volkswagen are shaking nervously while they await their verdict on what fine they will have to pay. If the worst case scenario happens (which seems like it will, as Americans will see another opportunity to protect their local car industry against foreign competition), then VW will have to pay $37,500 per car in fines, which results in a total fine of $18 BILLION. That’s a fifth of their profits gone. However, VW still have the 10.5 million diesels elsewhere with the same device and the same mistake made by them. So…it could skim Volkswagen until they have no money in them. A massive risk.

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Further, adding to their problems, VW saw $26bn of shareholders’ money just flying away in front of their eyes, as their share prices dropped from around $1.40 per share to 60 cents. That’s more than a half of company’s value gone. Adding more to that, their share prices could go further down in the future until the sales figures will be revealed for this quarter, showing actually how many cars they have actually sold less than before, especially diesels, which made 20-25% of their total U.S. sales. Shareholders would run faster than sprinters from the company, selling their worthless shares left and right. It scares me imagining what will happen next to them. All I know now is this: there is a chaos in the company.

First, their CEO, Martin Winterkorn, resigned just today (23rd September, 2015). The captain jumped ship before it sank. Everyone knows it was his fault, himself included, but you fix the problem and only then go. Second, VW aimed everything for their goal to become the biggest car company in the world by 2020, beating GM and Toyota in Sales, profits, and share prices. Looks like that goal is gone.

Shortly after the "Dieselgate" hit the fan, VW removed all of their "clean diesel" adverts, including these "Old Wives' Tales" commercials, which even I saw on TV when I was in the States.

Shortly after the “Dieselgate” hit the fan, VW removed all of their “clean diesel” adverts, including these “Old Wives’ Tales” commercials, which even I saw on TV when I was in the States.

Worse still, VW’s credibility as a reliable manufacturer is seriously damaged. Last time someone had this much damage from a bad publicity cos of a diesel engine was Oldsmobile, the very reason why Americans don’t like diesel. In 1970s Oldsmobile, after the oil crisis, thought they could earn money on customers looking for a cheap, efficient car. A diesel was a perfect bet, as it consumes less fuel and is as powerful as petrol cars. However, because of typical GMness, the design for the diesel engine was simple and rushed. All they did was replace petrol spark plugs with diesel ones, rearranged spark plug timing and hey presto. It wasn’t – the engines used to blow up or not start at all, so by the time they solved the problem, diesel sales stopped completely and the reputation of a diesel engine was forever ruined for Americans. Same as now.

POSSIBLE OUTCOMES (MY PREDICTIONS)

Firstly, let’s look at this graph:

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As you can see, VW from all brands contribute the least to their profits, yet earns most for their revenues. That means either they’ve allocated a huge chunk of money into development of new models, or they’ve reallocated it elsewhere to cover some losses or development of other projects, such as Bugatti Veyron’s successor, Bugatti Chiron. Then you see some higher value brands such as Audi (which are united with Lamborghini, because Audi branch exclusively own the brand) which are mechanically almost the same as VW, but here they pay that extra for the brand. The best example is Porsche/Bentley. According to Bloomberg, Porsche makes $23,000 on every car they sell, so they earn a VW Golf on each car they sell. Stronger on the brand spectrum than them is Bentley. I already talked about it in my previous blog post about VW’s badge engineering – Bentley Continental Flying Spur is nothing more than a VW Phaeton with a Bentley badge. The difference in price between VW and Bentley for this model is $100,000. Of course, Bentley has better leather and some wood, but in other ways it’s exactly the same. So Bentley earn an Audi A8 over every car it sells on top of the earnings of a VW Phaeton.

On the other end of the spectrum you have smaller brands like Škoda and Seat. For Škoda I could argue in favour more than against. They are the more differentiated than Volkswagen, as they have the Yeti and Rooster, which sell like cupcakes (at least until recently). However, the same cannot be said about Seat. For years VW executives have complained about how difficult it is to sell Seats and no matter how hard they’ve tried, they just don’t sell. Partly because they’re only sold in Europe, but mainly because they are just too similar to Volkswagens and Audis. I already showed this in my blog before, but they once actually made a Seat that’s exactly the same as an Audi A4. If you covered their brand logos up with sellotape, you could easily mix them up. There hasn’t been badge engineering this severe this side of GM.

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So my guess is this: if Volkswagen will have a massive chunk bitten off their finances (which, at this moment in time, it looks like it most certainly will), Seat will be the first brand to leave VW. As you see in the graph above, they make a loos on every car they sell, which in every sensible business would be a case for a closure of the brand. They could do two things: either sell the brand to a different manufacturer, or sell just their factories and get rid of the brand completely. The problem with the former one is, to Volkswagens own regret, Seats are just too similar to every other VW group model out there, so every Seat will hold an answer to every mystery of VW Golf, Polo, Scirocco, Audis etc etc. It would be a goldmine for other manufacturers and a death sentence for VW, who would give away the competition a huge market share. On the other hand, the latter version could not bring in enough cash and bring in a huge outrage in Spain, as the brand is part of country’s history. It’s their own, SPANISH brand, a national pride (I know the feeling, living in a country that used to make Fords for Eastern Europe in late 1930s). Also, who would want to have an empty factory in Spain? Ford? They already have one. Jaguar Land Rover? They have factories under construction in Brazil and will be in the U.S. GM? They have Opel in Germany which nearly went under in the Financial Crisis. So there’s no demand. One thing for certain, though, is this: they will keep Porsche and Bentley. They bring in too much money to get rid of them.

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If their efforts to raise cash quickly by selling brands will fail, then they will have to tighten their belts in the R&D department. Not only it will mean a reduced superiority over other brands, it will also mean a fall in reliability. So far they have been built really well, but as the graph before shows, they do not have a lot of profit cash to use to mend those problems, so they will have to use more of that revenue to cover their problems. That will further impact their sales globally, which is a real shame.

THE BRUTAL AUTOMOTIVE INDUSTRY

I am a fan of VW cars. But what I found most disgusting in this story is this: VW with this fault polluted the atmosphere more than initially everybody thought and they lied about it, but they killed nobody. General Motors, on the other hand, because of their lies and neglect, killed 31 people and injured 244. VW are facing extinction, yet all GM have done so far is pay mere $1.4bn in fines to shareholders and in fines to the U.S. Federal Government. In comparison, GM got away by paying pennies, yet their clueless, manipulated customers still buy their cars. Their sales actually were not affected by much. And VW are facing extinction. RIDICULOUS! Absolutely disgusting, that human lives are worth less than company’s integrity and truthfulness. All GM did was blame it on “Old GM”. Excuse me, but that’s exactly the same company. There is no difference. You screwed it up? You are responsible for it. That means VW’s new CEO has to say “that was Winterkorn’s VW. We’re different now” and prosecutors will forgive them? That is how it looks like.

But this shows how horrible the automotive industry can be – you never know what you’re gonna get (like Forrest Gump said). Whatever happens, I wish Volkswagen all the best of luck in the coming months, because that is what they will need most. They cannot hope on anything else for now but survival.

Hot Pursuit: Countries where you really should obey the law on the road


Today let us look at various police forces around the world. But we are not after just speed ticket fines here, oh no. We’re after police cars that are powerful and quick enough to give the baddies a hard time.

USA

The land of the free – free speech (sort of), free enterprise (that they are blindly following), free choice to hold a gun (this has entered a dead end, unfortunately) – but when it comes to police cars, it’s not as free as you think it is.

First of all it’s the violence of the police force when attempting to stop the bad guys. You have seen endless hours of footage where police cars are ramming the “bad guys” off the road. And it’s not some soft push, saying “please, can you stop now?” It’s like in the films: “FREEZE, BASTARD!” Like they do in Gran Theft Auto.

Then they have proper cars for the job. Long gone are those fat, long Ford Crown Victorias you used to see in films. Now there are new kids on the bloc. First one is Bloomfield Township Police Department’s Cadillac CTS-V. For those who don’t know, the V in a Cadillac model name is the performance designation, i.e. it is a hard core version of that model. Same as the M is for BMW, AMG is for Mercedes, the R for Jaguar etc. This car is powered by the same 6.2 litre V8 engine that you find in Chevrolet Camaro. It’s no surprise, as everything GM does is then freely shared among other cars in the company. Cost saving at its best….or maybe finest…or purest…it’s hard to find the right word because this kind of cost saving practice isn’t anything positive. Why not? Google “GM Recalls” and you’ll see why.

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But there are some cars they have that don’t spend their time at a dealership having everything stripped and rebuilt. One of more famous recent police fleet updates are Dodge Chargers. Just recently, Dodge updated the Charger and, indeed, made a police version of that new car too. Unless you have a high-end exotic like a Lamborghini or Pagani or Bugatti, when you see the Charger and red & blue lights in the mirror, pull up, just for your own life’s sake.

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UNITED KINGDOM

On the other hand you have the UK and the police force mainly containing old Vauxhall Astras and Volvo V70s. On the plus side, before police leave the station to trace down and apprehend the miscreant, they have to go through the thing Britain is doomed with nowadays – health and safety checks, so by the time police cars in London will get the backup they’ve asked for, the criminal will already be in Poland by then. And there is no ramming or bashing either. They are tactical there. So I would like to imagine police trying to catch a fast, out of control maniac who’s going all over the place on the motorway.

But luckily for them they have a couple of cars that could be up for the job. One of them is one of ultimate “I-didn’t-know-it-is-that-fast” cars: Lexus IS-F. Yes, a Lexus IS-F! In a fleet alongside those Astras and Volvos the Lexus is like a unicorn. A quick unicorn too. it has a 5.0 litre V8 engine, a top speed of 168 mph (270 km/h) and 0-100 km/h time of 4.7 seconds. This very car is one of official vehicles of the Humberside Police squad. The reason for that is, as one of police officers said, “to help the force run down drug dealers in high-powered sports cars, and it has been used to seize criminal assets, too.” Good thing Breaking Bad wasn’t set in Humberside.

Lexus IS-Force

Another surprise is in Norfolk. Of course, to represent local car manufacturing traditions, Norfolk police use Lotus Evora. It actually is one of the best cars for the job, because it is quick enough to stop runaways and it sticks to the road like glue (as you would expect from Lotus). There’s only one drawback – it’s Norfolk, the county that has the lowest crime rate in the UK. That’s like getting bouncers to watch there are no fights in the kindergarden. But it is still cool.

2010_Lotus_Evora_-_UK_Police_003_1128Finally, London Metropolitan police. They made one of the stupidest decisions in the world. What they did was they bought a Lamborghini Murcielago (which alone cost around £200 000 when it was new. And that’s tax payer’s money, ladies and gentlemen, that they used. They said they didn’t, but so did Viktor Yanukovych when he built a villa for himself) and turned it into a police car. So they got a bit over the top with expenditure. Secondly, it’s completely useless. They did make it just for an MPH Car Show in 2006, but a Lamborghini supercar as a police car in CENTRAL LONDON? Where fastest you can go is walking pace? Besides, of all the beautiful cars in 2006 (like Aston Martin DB9, Jaguar XK, Pagani Zonda or Mercedes SLR) they chose one of the ugliest Lamborghinis ever made. Well done, Rozzers.

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GERMANY

Of course Germany have been known for those fantastic autobahns with limitless speeds and fantastic cars. It seems like it is a country that has a match made in heaven. But just to be sure that this limit is not exceeded too far, they have made sure that those on the Autobahn still obey when they see Porsche 911 police cars in the mirrors. You have seen them, probably, in Need For Speed: Porsche Unleashed, but they are real. German “autobahn politzei” actually use 911s in their fleet for a good reason – most of production cars nowadays come with a speed limiter of around 250 km/h or 155 mph. The Porsche 911 top speed in its model range starts from 180 mph or 290 km/h.

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UAE

When it comes to exclusive police cars we have to talk about Dubai. They have the fleet of police cars so exclusive that some actually want to break the law just to be apprehended and taken around in one just to enjoy the ride of their lives before landing behind bars and getting lashed by their judges.

Just have a look at this escort:

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Back to front in this picture you see a Bentley Continental GT, McLaren MP4-12C, Ferrari FF and Bugatti Veyron. And judging by those people taking photos in the background, this picture is absolutely real.

I have no issues with the Dubai police….well I didn’t, until I saw THIS:

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If it was a Bugatti Veryon, I wouldn’t be bothered. But it isn’t. It is, in fact, an Aston Martin One-77. A car that is a masterpiece. It is the ultimate toy of a petrolhead car collector, an ode to automotive industry. What those morons in the Dubai police force did was take the actual painting of Mona Lisa and with a graffiti spray paint wrote “PROPERTY OF THE DUBAI NATIONAL ART GALLERY!” Why? The name One-77 is a clue. This car has only 77 hand made, patiently crafted beauties on the road. They basically ruined one of them. Just strapped some police lights, put some liveries on it and just ruined it. This car deserves to be driven around Stelvio pass with windows right down, stereo off and revs going as high as possible, NOT to be a show car for the wealthy. I just can’t stand when such delicate car brands are being ruined by these filthy-from-money individuals. First it happened with Bentley. Before the Continental GT came out Bentleys were known for their Le Mans history, for being elegant and fast get-about for the true gentlemen. Since the Continental GT came out, people from such “talent shows” as “The Only Way is Chelsea” or “Made in Essex” (I know I’ve written it wrong but I am so mad I just can’t be bothered to write it correctly) are buying these cars to show off. Therefore the whole reputation of the brand is RUINED. Everyone now who looks at a Bentley is thinking “oh look, a snobs car”. Same applies to Mercedes. I don’t want Aston to be part of this terrible fate. It is supposed to be like James Bond – mysterious, sharp and masculine – not like James Packer.

Next time, let’s talk about countries where you don’t have to fear from police.

About being a true petrolhead


Who do you think you are?!: What makes a true petrolhead?

 

 

I hesitated to talk about this topic for long but, after a desperate invitation on Instagram I’ve decided to let it loose and expose these “petrolhead wannabes”.

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The guy in question invited to follow his profile on Instagram. He said it’s about “cars” and I just thought I might check out this guy. But as soon as I opened it, it was yet another one of those million profiles out there, one of those who think they know about cars and think that the flashier the brand is, the cooler the car is. Umm….NO. STOP IT!

 

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Just to give a flavor of what I’m talking about here are a few of his (not sure if his, but they are there) photos. Just a bunch of ordinary midlife crisis cars.

 

First of all, if you are a true petrolhead, you can’t possibly like just new Ferraris (he had quite a few on there). If you say “hey, I love that Ferrari 458” or “Ferrari F12 Berlinetta is the best car in the world”, I laugh my insides out (in my mind, of course), because a true petrolhead doesn’t like just recent Ferraris…or Ferraris in general. Do you know why? Because anyone in the world knows what a Ferrari is and non-enthusiast’s first supercar of choice will always be a Ferrari. It’s a dream car for unimaginative businessmen and for those who think “LSD” is a drug, not a piece of car technology that improves handling. Someone who likes a Ferrari can be regarded to be a petrolhead ONLY if they have a knowledge of the brand and they like the genuine Ferraris (Daytona, 250 GTO, Flat-12 engined Testarossa). They have knowledge and they can say that those cars then were Ferraris. If Enzo Ferrari was alive today, he’d punch Ferrari executives of today directly in the face because the company nowadays go completely against his principals – he made cars to be piece of art and don’t even try and think of doing excessive mass production of them. Enzo made cars primarily to fund his F1 team.

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Ferrari Daytona. If you can tell more about Daytona, then I might think you are a petrolhead

Then there’s the “crown” of petrolhead wannabes – Bugatti “Škoda Headlights” Veyron. Some post pictures and write that that is the coolest, most beautiful car in the world. Excuse me? Lamborghini Miura is beautiful, Aston Martin DBS is cool. Veyron is an example of over-engineered, overpriced, overrated car for people with “SCS” (Small Cock Syndrome); for those who just don’t know what to do with their money and they waste on a car that you can’t drive (more about it in my

About Veyron drivers and Bertone” article.

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Tell me once again that Bugatti Veryon is cooler and prettier than this Aston Martin DBS and I will recommend you an optician to visit because you are possibly blind.

 

Then there are those who think wrapped cars are cool. How in the name of God can you call yourself a petrolhead if you cannot appreciate car’s original looks? The ones that really get on my nerves (and there have been quite a few of those wrapped in shiny wraps) are Bentley Continental GTs, the ultimate show-off Napoleon’s car (and by “Napoleon” I mean a guy who makes himself look “greater” by buying these “bling-bling” automobiles. I know Napoleon himself was an interesting character, but let’s stick to showing off). There will always be someone driving around town in a Bentley at night…wearing sunglasses. That’s just their nature. No wise man will buy a Bentley. You say “oh hang on, but what about the Flying Spur?” Sorry, Gullible Gustav, but “Flying Spur” is just a VW Phaeton with a Bentley badge stuck on the bonnet (one of worst badge-engineering examples ever executed by VW). Don’t get me wrong, Phaeton is a great car, but why waste thousands more buying a Bentley when you can buy a VW for a fraction? If you want prestige, buy a Jaguar XJ, Maserati Quatroporte or a Mercedes S-Class. Or, in worst case, an Aston Martin Rapide. Use common sense.

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Bentley Continental GT. Just when you thought it couldn’t get any worse…well…this happened. WHY?

 

So, now you might as, if you are a petrolhead, how can you prove that? Simple. I like cars based on their heritage, technology and personality, not based on what everyone else thinks. The most important thing of being a petrolhead is to be individual, to not be afraid to share views on any car or any brand. Then you might ask “what cars do you like then and why?” Ok, let’s list just a few, shall we?:

 

1)   Jaguar E-type 4.2 liter Series 1:

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It has to be Series 1, because, personally, I have a feeling that those sealed headlights make that car complete. And the Series 2 and 3 are too American (Jaguar had to customize them to American needs), so they became fatter and more ordinary. I think the ugliest E-type of them all is the E-type Series 3 2+2. Simply because the cabin silhouette is a bit too big, it starts to make this British beauty look like a fishbowl on wheels. Anyway…Series 1 4.2 liter simply because it gave the power that Jaguar promised and because that noise is my favorite car noise in the whole world. I can listen to it day and night and never get tired from it.

2)   DeLorean DMC-12:

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Ok, some might protest now. I know, I know. DeLorean wasn’t that brilliant. It had its flaws such as its engineering (doors, if opened to rapidly, can be deformed, hence that plastic line on the side might look “broken” because of increased panel gaps), performance (the PRV-6 engine combined with laughable American emission restrictions made this car as powerful as a base trim Hyundai of today) and its infamous creator, genius and felon John Zachary DeLorean . But at the same time this story is so mysterious and crazy that it makes me to love this car. I am one of few people in the world who loves the stock car more than the Time Machine in “Back To The Future” and I am definitely considering of owning one in the future when time will be right.

3)   Face-lifted SAAB 900 Turbo Coupe:

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The classic one, obviously. It still is a rather cool and great to drive car. Coupe somehow is well proportioned and it is, I think, the best-looking SAAB there ever was and will be. Also because, though being fast and great to drive, it is still as comfy as Queen Elizabeth’s bed and is one of few coupes that can sit 5 people easily.

4)   Jaguar XK:

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It is the best looking car of today. Forget about the useless rear seats, this car is for gentlemen. Because it saved Jaguar in 2000s, when Ford made such a hustle of it (but it was nothing compared to the disaster that GM created out of SAAB) and because it is a car that truly can be treated like a woman. It’s hips over the rear wheels, the long hood, cat-eyes and the window frame (somehow classic). And because it’s a Jaaaaag.

5)   Lamborghini Miura:

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The genesis of supercars and a Mona Lisa of automotive culture. Read more about it in my “About Veyron drivers and Bertone” article.

6)   Rover Mini Cooper:

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The pre-2001 Minis were Minis. It’s hard to call the post-2001 ones Minis as it’s hard to see in what way are they small. But the original Mini, I’ve driven it, it is brilliant, corners like nothing else out there, is super cute and it is the only car that I’ve seen who’s drivers are waving at each other as they pass. Gives you a feeling that you’re part of another big family, doesn’t it?