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An interesting article on the VW scandal.
VW scandal exposes cozy ties between industry and Berlin
http://www.reuters.com/article/2015/09/2...BU20150926
Winston Churchill:-
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
"The farther backward you can look, the farther forward you are likely to see."
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(26-09-2015, 10:06 PM)Art or Science Wrote: An interesting article on the VW scandal.
VW scandal exposes cozy ties between industry and Berlin
http://www.reuters.com/article/2015/09/2...BU20150926
Whole world is a CON job... u scratched my back, I scratched yours... in the end its all about "what do I get"
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Kopi Tiam chit chat:
On the German automakers
my sifu said if u can't trust Germans who can u trust?
Frankly its a game of thrones between the dead broke and the upcoming broken
US is dead broke and hence they have to find excuses to gotch Germans especially when they are so successful in making cars
bottomline emission quality doesn't reflect that of efficiency
u c prior to all these green house gases, human beings are destructive just that they dunno they are
even diesel suppose to burn cleaner is pollutive
in fact he said the main aim of the yanks is to shift demand to EV - ie Tesla - top American owned and backed EV co
only drawback is the battery life which remains on the infancy stages and may cause huge problems to performances of cars
now best
all the r&d heads of the units all resign and gone
from low end skoda to flagship vw to audi and even porsche
no more r&d for time being until another bunch emerged
i was talking to him while driving
in the end as he is into cycling now
he said paddle power is the greeniest
he said the leader in electric power booster for performance bikes is Bosch
another German
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- Sep 26 2015 at 1:15 AM
- Updated Sep 26 2015 at 1:15 AM
Volkswagen scandal: Is is the end of the road or time to hop in?
NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/s/p/y/y/image.related.afrArticleLead.620x350.gjsw42.png/1443055933306.jpg[/img]The matter may cost Volkswagen $US18 billion in penalties. Getty Images
by Greg Smith
This week has been the bumpiest of rides for Volkswagen, with revelations last weekend that the world's largest car maker has manipulated emission test results to make diesel vehicles appear less polluting. The company now faces an inquiry by a United States watchdog and fines are likely to run into the billions. The market reaction has been scathing, and VW is now trading at less than half the peak levels of €250 ($400) seen earlier this year.
The company has immediately set aside €6.5 billion to meet the costs and fines related to the scandal. However, investors have focused on the 11 million vehicles worldwide that may be equipped with software that could be used to cheat on emissions tests.
This is 20 times the 482,000 vehicles sold in the US that were initially indicated as being affected. A key issue is whether emissions test cheating took place outside the US.
PROSECUTION
In terms of financial impacts in the US, customers may be entitled to direct compensation as well as any vehicle rectification, or even complete reimbursement. Regulatory fines could reach up to US$37,000 a vehicle, or a maximum of US$18 billion ($25.5 billion). Criminal prosecution is likely to be aimed at senior executives.
The wider issue is the brand impact for Volkswagen and how the scandal affects sales. In terms of Volkswagen's brand, credibility in clean car technology and general trustworthiness are likely to take a hit. We note that the group has been marketing "clean diesel" cars for some time. In the US around 4 per cent of the market is made up of diesel cars but in Europe they account for half of all the new cars sold. Volkswagen's diesel sales in Europe may suffer if they are now perceived to be less "green".
Overall it is likely to be some time before we have a definitive guide to the global impact. The market, though, as always, has assumed the worst.
DAMAGED MOMENTUM
While a big, and unknown, number, Volkswagen should be reasonably well placed to meet the direct financial costs (if they fall into the middle of a fairly wide range of expectations). The company recently sold its stake in Suzuki for US$3.8 billion and key premium brands such as Audi and Porsche have also been delivering record monthly sales. However, the brand damage may interrupt Volkswagen's momentum in the US (around 9 per cent of sales volumes) and have an impact in Europe and Asia (both around 40 per cent of volumes). Concerns over the latter has already been weighing on the share price in recent months.
"Deep value" has emerged in the stock, though, which now trades on around five times earnings, and already there are more than a few parallels (casualties not being one of them) with the crisis BP endured following the Gulf spill. Just as then, Volkswagen may prove an opportunity for the brave once the dust settles and as more colour is gained on likely outcomes. Another angle is that other stocks in the sector which have been tarnished with the same brush of sentiment (for example, BMW and Daimler) could prove to be compelling value if they are found to be squeaky clean.
Greg Smith is the head of research at investment research and funds management house Fat Prophets. Disclosure: Interests associated with Fat Prophets declare a holding in Volkswagen.
You can also get a free trial to Fat Prophets' daily market commentary.
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- OPINION
- Sep 23 2015 at 9:27 AM
- Updated Sep 23 2015 at 9:27 AM
Volkswagon emissions scandal will speed up dirty diesel's demise
NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/q/b/x/v/image.related.afrArticleLead.620x350.gjsrsw.png/1442964465933.jpg[/img]Like many European cars, the VW was far too reliant of diesel technology - a fuel which European regulators foolishly backed for too long.
by Leonid Berhsidsky
The Volkswagen emissions scandal has broader implications than the potential damage it can do to Europe's biggest carmaker. It's the result of Europe backing the wrong emissions-reducing technology on a regulatory level. There is now an opportunity to reverse that error and force the continent's сar manufacturers to concentrate on hybrid and electric vehicles. They've got the technology and resources to reshape the market.
The scandal is about VW's bad business decision to cheat testing equipment so it could rush new engine models to market in the US It is also about a failure of regulatory oversight and testing technology. Most of all, however, it's about diesel engines: They were the ones performing so badly on the tests that VW engineers had to look for a workaround so marketers could trumpet the advent of "clean" diesel.
VW had an advantage in diesel technology, which it wanted to leverage in the US, for a reason. In the mid-1990s, the European Commission and European Union member countries' governments started a campaign of massive intervention to stimulate the use of diesel engines in cars. At the beginning of that decade, Europe and Japan had about 10 percent of diesel automobiles on the road. After 1995, the trends diverged widely.
In a 2013 paper, Michel Cames and Eckard Helmers estimated that without the government intervention, diesel automobiles would have accounted for about 15 percent of vehicles on the road in 15 core EU countries, but now they make up 35 percent of total cars. This is the result of lower excise taxes on diesel than on gasoline throughout most of Europe (the UK is a notable exception) and relatively lax environmental standards for diesel engines, allowing higher emissions of nitrogen oxide and harmful particles.
Some countries, such as Belgium, France and Spain, have long imposed lower taxes on diesel cars. In France, Peugeot even obtained a government guarantee of such a tax policy before prioritising the development of diesel engines over gasoline ones.
As a result, most core EU countries have more diesel cars on the road than any other kind. Only the Netherlands, and to a limited extent Germany, have bucked the trend by avoiding diesel-stimulating policies.
It's possible that the incentives were the result of oil industry lobbying -- as the sales of fuel oil fell, refiners needed to sell more diesel fuel, which is a similar type of product. But they probably stemmed from a misunderstanding of the environmental consequences. "Green" regulation in European countries has centred on CO2 emissions, and diesel exhaust contains relatively little of that gas. Smog-creating NOx and soot particles were overlooked until the ultra-strict Euro 6 standard came into effect this month.
The French authorities have now realised this. It would have been hard not to: Paris has a smog problem, which it didn't have in the 1990s. "In France, the diesel engine has long been privileged," Prime Minister Manuel Valls told an environmental conference in November, 2014. "That was a mistake."
The government now wants to move toward a diesel ban, which will force Renault and Peugeot to make a difficult transition since about two-thirds of the cars they now sell in Europe are equipped with diesel engines.
In fact, most European carmakers have a bad case of diesel dependence.
Modern diesel engines are capable of keeping emissions below levels permissible under Euro 6. Implementing the necessary technology, however, makes the cars more expensive, may affect their performance and requires the owner to watch the level of yet another liquid -- urea, used to reduce NOx. So even the cars sold today do not meetthe emissions standards on the road, regardless of how they do in tests.
Following the VW scandal, testing is likely to become more rigorous both in the US and in Europe, and more producers will be caught and fined for non-compliance. There will be only two paths for them to take: making sure the emissions performance of all new diesel cars is irreproachable -- which isn't easy in the real world -- or shifting production toward hybrid and electric vehicles, as Japanese companies did when they decided diesel was on its way out.
In 2013, according to the International Council of Clean Transportation, Japan had 21 percent of hybrid and electric vehicles in its fleet -- more than any country in the world. The European leaders in the technology, Norway and the Netherlands, had 12.8 percent and 11.3 percent, respectively. Germany had just 1 percent.
European automakers have the technology to compete in the electric vehicle market: Their models outsell Japanese and American ones in EU countries where electric powertrains are popular. In business terms, however, the move away from diesel -- which should accelerate now -- will be extremely costly, much more expensive than the regulatory fines the industry will probably face in the aftermath of the VW scandal.
There's light at the end of the tunnel, though. Once the transition is completed, the Europeans, with their engineering strength, will make the hybrid and electric market much more competitive. In the US too, Volkswagen will be back: after all, its e-Golfoutsells the Tesla Model S in Norway today.
Leonid Bershidsky is a Berlin Based columnist for BloombergView
Bloomberg
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How to trade air quality when the quantification is so subjective... appears more like another con job to me... maybe should consider haze as carbon emission as well and trade it...
Big loophole in global emissions trading
[b]The world needs to understand that the Volkswagen high-technology emissions fraud is not going to be an isolated incident.[/b]
As the world starts to look more seriously at global emissions trading, we are opening up an opportunity for massive carbon frauds because the technology will move ahead of the regulators and testing mechanisms unless great care is taken.
Indeed, all those supporting emissions trading should realise that unless carbon emissions are very closely regulated and tested, sophisticated versions of Volkswagen affair will sweep the world. There are fortunes to be made.
Europe has an internal emissions trading scheme and my guess is that many technical people will have both known about and will have been watching what Volkswagen people were doing. Almost certainly if we start to look seriously at what has been happening in Europe, I would be surprised if more Volkswagen-style carbon emission frauds were not in existence.
China has announced an emissions trading scheme within the country, much of it directed at the materials Australia exports. China has actually taken emissions seriously, but how serious they will be in 2017 and beyond will depend on their level of unemployment. If China finds the social costs too high, it will do a ‘Volkswagen’ and use technology to make the figures look good.
Volkswagen has shown everyone that there is technology that enables enterprises to tick the emissions boxes but not reduce carbon.
If emissions trading becomes inter-country and those burning carbon can buy credits internationally, there is no doubt that technology will be available to commit massive fraud.
While the original Australian carbon tax structure was just about the stupidest thing any country like Australia could do, if the world, led by the US and China, does embrace emissions trading, then we must follow. But we will need to make sure that the carbon credits purchased are real and not Volkswagen-type scams.
In many ways Australia is now following the China pattern where considerable work and government help is being injected into the system before emissions trading is considered.
And we have structured our Direct Action plan to make fraud difficult, though it is still possible. Government payments are not made until the emissions have actually been reduced in accordance with the agreed plan.
The Australian Government plans to reduce greenhouse gas emissions to 26-28 per cent below 2005 levels by 2030, which is a big increase on Australia’s current target to reduce emissions to 5 per cent below 2000 levels by 2020. But carbon reduction technology, helped by batteries, is going to enable us to reduce emissions without creating a recession.
Prior to the announcement of this target I interviewed Greg Hunt on video and the interview is worth looking at again because Hunt details how the 2030 emissions reduction will take place (Why Greg Hunt is one of the Coalition’s best assets).
Hunt is very confident that the next auction to ‘buy’ government help to reduce carbon emissions will be even more successful than the first one because large areas of industrialised Australia have now cottoned on to the minister’s grand plan.
One of the biggest areas of emissions reduction in the post-2020 era will be Victorian brown coal. New technology has been developed to burn the coal much more efficiently and to greatly reduce emissions.
There is also technology being developed in North America that will capture coal carbon emissions for other uses and for storage. BHP has linked with Sask Power in Canada on a carbon capture process.
In addition, Australia will adopt European car emissions standards now that the local motor industry is to be closed down.
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A big boost to people like Elon Musk/Telsa and BYD of China? The Europeans are the predominant pushers for "clean diesel" for the better part of a decade, while you see hybrids being more prevalent from Japaneses manufacturers and electric vehicles from the US and China.
You can count on the greed of man for the next recession to happen.
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VW diesel scandal boosts e-cars and graphite
Barry FitzGerald
[Image: barry_fitzgerald.png]
Resources Editor
Melbourne
[Image: 770311-bd1bfe9c-6a5d-11e5-9bb9-94d25a90b8df.jpg]
Tests in the US showed VW emissions exceeding legal limits by as much as 40 times Source: AFP
[b]Volkswagen’s diesel emissions cheating scandal is being seen as a positive for Australia’s emerging graphite producers.[/b]
The scandal is tipped to accelerate a move away from diesel powertrains — found in more than half of the European car market — to electric vehicles, hybrid vehicles and plug-in hybrids, which increasingly rely on lithium ion batteries that use graphite.
VW has admitted using software cheating technology so its 1.6L and 2.0L diesel engines met legislated air pollution limits. Without the cheating software, tests in the US showed emissions exceeding legal limits by as much as 40 times.
Credit Suisse analysts said that the VW scandal had broken the “myth’’ that diesel engines can be both efficient and clean.
“While diesel engines do emit less carbon dioxide, they fail owing to the particulates and nitrogen oxides,’’ the investment bank said. Nitrogen oxides react to form smog and acid rain.
CS Suisse said that with diesel technology now derailed, the VW scandal could accelerate the uptake of electric vehicles to meet ever-tightening global emission limits.
“Accelerating uptake in use of electric and hybrid cars appears driven by consumer demand, reflecting technology breakthroughs, price reduction, compelling vehicle performance statistics, consumer preference and increasingly stringent controls on vehicles’ carbon and other emissions that appear difficult to achieve with conventional internal combustion engine powertrains,’’ CS said.
It added that demand growth appeared increasingly independent of the declining oil price, although conversely, a rising oil price environment was likely to be positive for EV demand. That demand comes on top of much larger overall battery demand growth for home battery storage (solar), and grid power management/generation from intermittent renewables (solar and wind).
The report said that the battery-grade graphite that Australia’s leading graphite stock, the $610m Syrah Resources, planned to produce from its Balama project in Mozambique could prove to be critical in meeting global demand.
“Syrah’s Balama graphite deposit appears to be … the only one with demonstrated high quality and high quantity commercial spherical graphite production potential.
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The town that VW built remains cautious
[Image: 566858-4e0b215e-6a3a-11e5-95d3-14a82c556d0b.jpg]
The city of Wolfsburg, Germany has a population of 123,000 and of those 50,000 work at Volkswagen. Wolfsburg has the highest income per capita of any city in Germany. Source: Getty Images
[Image: 567075-30db4ca8-6a3a-11e5-95d3-14a82c556d0b.jpg]
German Nazi leader Adolf Hitler speaks at the opening ceremony of a Volkswagen car factory in Fallersleben, Lower Saxony, 1938. Source: AP
[b]In the hometown of Volkswagen, residents are bracing for a bumpy ride.[/b]
Wolfsburg grew around a 1938 factory created as part of Adolf Hitler’s plan to mass-produce his “people’s car”. And the carmaker’s fortunes and those of the town’s 125,000 people remain intimately connected.
Anticipating a slump in corporate tax from the carmaker in the wake the scandal surrounding its recent admission that it cheated on diesel emissions tests, the city has issued a budget and hiring freeze. City officials have halted all new infrastructure projects — including work on a new €70 million ($111.3m) cultural centre and fire station — until there is more clarity over the main question on residents’ minds: How deep will be the damage?
“I believe we have a few tough years ahead of us,” said Angelika Jahns, a native Wolfsburger and member of the parliament of Lower Saxony for the Christian Democratic Union. “I’ve seen other crises, but this one seems different as it’s about trust,” Ms Jahns said.
Few people want to talk about the scandal and many, in solidarity with the company, dismiss events as “overblown”.
“We don’t talk about it, especially not at work,” said Ralf Muhlisch, who has worked at Volkswagen since 1978 and is the mayor of a town district for the Social Democrats. “Volkswagen is our heart. We still know we have great products and are proud of them.”
The unease that hangs over Wolfsburg mirrors fears that have reverberated throughout Germany for the past two weeks. Carmakers and their suppliers accounts for nearly 20 per cent of Germany’s exports and contribute about 3 per cent to the country’s gross domestic product, according to the German auto industry association VDA. Economists warn that the German economy could suffer from potential job losses as one in seven jobs in the country are, directly or indirectly, dependent on the sector.
“Besides short-term financial impacts, the bigger threat is if the scandal damages the image of the Made in Germany brand collectively,” said Martin Gornig, of the German Institute for Economic Research. “There is bound to be a negative spiral.”
In and around Wolfsburg, concerns are more concrete. The group’s engine plant in Salzgitter, one of the largest engine manufacturers in the world, last week lowered production in a precautionary measure, according to a spokeswoman for the plant. Volkswagen’s financing unit based in nearby Braunschweig also instituted a hiring freeze in response to the emissions scandal.
“The atmosphere is tense … I fear for my job,” said Matthias Mann, 41, who works at one of the close to 2200 suppliers that had settled in and around town. “We are married to Volkswagen.”
Volkswagen means more than just jobs for its people.
While Detroit has declined in concert with the US carmakers based there, Wolfsburg has mainly prospered with Volkswagen. What used to be a tiny blue-collar village is now one of Germany’s wealthiest towns, where many workers enjoy above-average incomes and a rich cultural offering for a town of its size.
Thanks to high tax revenues from Volkswagen, the city now boasts a large modern art museum and futuristic science centre. Visitors and top earners can dine in Michelin-starred restaurants, sleep in a five-star hotel and shop for designer clothes.
Volkswagen is one of the region’s main investors in new housing construction, higher education and research. Most Wolfsburg households own two cars — Volkswagens and some Audis, mainly — and are supporters of premiere league soccer club VfL Wolfsburg, also owned by the carmaker.
But such affluence also means Wolfsburg has a lot to lose.
“We are used to a certain standing, no one wants to see that go,” said Sieghard Wilhelm, 67, who worked at Volkswagen for 36 years and is a member of the Greens in the city council.
For many Wolfsburgers, solidarity with Volkswagen is bigger than fear.
Few locals say they believe the company will suffer lasting consequences. Some even evoke a US-driven conspiracy against an annoyingly successful German brand.
Wolfsburg is no stranger to tough times. After a slump in the auto industry in the early 1990s, Volkswagen instituted a four-day week in a bid to preserve 30,000 jobs, a measure still on older people’s minds.
“All of this is hot steam. It will go away again,” said Klaus Masche, 60.
Mr Muhlisch, like most people here, is stubborn in his optimism that the company will ride through the crisis without lasting damage.
“Every time I come back from vacation and see those towers, my heart jumps,” he said, staring at the landmark smokestacks of Volkswagen’s power plant where his father worked before him.
“Of course it’s not good to cheat, but it’s not like someone died.”
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- Sep 28 2015 at 10:25 AM
- Updated Sep 28 2015 at 10:25 AM
European diesel, up a technological dead end
NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/t/l/o/e/image.related.afrArticleLead.620x350.gjw6z5.png/1443399911672.jpg[/img]Europe has pursued diesel technology for economy and environment reasons. But following VW's revelations it seems the technology has lead Europe into a dead-end. AP
by Jonathan Ford
Big technological bets can make or break companies. Not every cunning innovation can be a winner. For each James Dyson with his triumphant bagless vacuum cleaner, there is always a Betamax video cassette just waiting to flop.
Sometimes these rolls of the dice can come back to haunt entire industries. The storm surrounding Volkswagen's flouting of emission standards may currently centre on the German company's shamefaced confession that it manipulated data. As a transfixed driving public has noted, this has put both its reputation and financial health at risk.
But behind the clamour lies a deeper worry; and one that affects not just VW but other European carmakers. It concerns the technological bet placed by these producers. Alone among their peers in the developed world, they have prioritised the development of diesel passenger cars.
These are, of course, the offending vehicles in the VW scandal. The company has owned up to tweaking software to spoof tests designed to ensure that its diesel engines lived within the prescribed rules concerning air pollution. When fairly assessed (and in spite of being badged "clean diesel") they exceeded US legal limits by as much as 40 times.
To miss by such a margin would be calamitous, even had VW not compounded the fault by concealing it. The result raises questions about the very viability of its technology. What is worse is that VW and its fellow European carmakers have so much riding on the legality and acceptability of diesel itself.
Since the 1990s, these manufacturers have configured their businesses to utilise this technology. In 2011, for instance, diesel powered vehicles accounted for more than 50 per cent of EU car sales - almost all of them domestically made. Elsewhere in the developed world - the US and Japan, for instance - they represent a measly 1 per cent of the outstanding fleet.
European manufacturers went down this path not because of the underlying superiority of the technology. Noisy, dirty and rattly, it was historically confined to commercial vehicles. Its one big advantage is fuel consumption.
Because the diesel mechanism burns hydrocarbons more efficiently, it consumes about 25 per cent less fuel than the petrol equivalent (resulting in a smaller but meaningful reduction in greenhouse gas emissions).
Carmakers were not alone in spotting diesel's fuel efficiency. It also intrigued EU governments, which saw the technology as a way to meet targets on CO2. They nudged the industry further along the path to dieselisation, reinforcing the fuel-saving benefit and offering consumers financial incentives to switch. These proved more than sufficient to offset the premium (about €3,000) that makers charge for building sophisticated diesel engines suitable for passenger cars.
The continent's idiosyncratic predilection for diesel has not been without advantages for manufacturers. It has made their home market harder for rivals to penetrate, preserving both sales and employment.
True, this imposes a reciprocal handicap abroad - due to the reluctance of customers there to buy the technology. One reason VW was so keen to push "clean diesel" in the US was to stem steep falls in its market share, which had halved since 2000.
But carmakers now have bigger reasons to rue their "dash for diesel". The main worry with the technology has always been pollution. While diesel engines are sparing on CO2, they chuck out lots of unpleasant particulate matter and harmful nitrogen oxides.
The hope was that manufacturers would find clever solutions to meet tightening pollution standards without putting diesels beyond the pocket of the average driver. This has been thrown in the air by VW's shock admissions.
While there are fixes that would make the cars' emissions compliant, these are expensive - potentially adding thousands to the list price of even a modest car.
Nor is the crisis necessarily confined to VW. The German company is not the only European diesel manufacturer to have posted puzzlingly better emissions results in tests than its cars seemed to achieve on the road.
Industries court peril when they throw capital and energies into also-ran technologies. Kodak, the US camera maker, foundered after failing to keep up as its rivals digitised.
Europe's carmakers could be similarly outmanoeuvred by the Japanese-led move into petrol-hybrid vehicles. At no greater cost, these do not have the pollution downside of diesel. The fuel economy they offer is superior.
Europe's obsession with diesel may have driven its car industry up a technological dead end. Extracting it from this predicament will be no mean feat.
jonathan.ford@ft.com
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