VW shares crash 20% on emissions cheating scandal
09-21-2015, 04:38 PM
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VW shares crash 20% on emissions cheating scandal
http://money.cnn.com/2015/09/21/inve...eating-shares/
Shares in Volkswagen crashed 20% Monday, wiping 16 billion euros ($18 billion) off the company's value after it was found to have misled U.S. regulators.
Federal and state regulators said Friday that the German company cheated on environmental standards by programming some diesel-fueled cars to turn on emission controls only when being tested.
Volkswagen, recently crowned the world's biggest carmaker by sales, also owns the Audi and Porsche brands.
The software is installed in nearly 500,000 cars on U.S. roads, including some of its luxury-brand Audi cars.
"The vehicles [with this software] would run 10 to 40 times more emissions than showing in the test," said Andrew Lee, an autos specialist at consultants Frost & Sullivan.
Regulators have ordered Volkswagen (VLKAY) to recall the vehicles. The company said it was halting sales of some cars in the U.S.
"This really does cast a negative light on Volkswagen, who are really well known in the industry for having very good mid-segment cars," said Lee.
Volkswagen stock hit its lowest level in nearly three years, and pulled down shares in other German automakers such as Daimler (DDAIY) and BMW (BAMXY).
The models affected include the VW Jetta, Beetle and Golf from 2009 through 2015, the Passat from 2014-2015 as well as the Audi A3, model years 2009-2015. Owners of the "CleanDiesel" automobiles have filed a class action lawsuit against Volkswagen.
The company said it was not aware of any similar issues outside the U.S.
"This really does cast a negative light on Volkswagen, who are really well known in the industry for having very good mid-segment cars," said Lee.
Volkswagen stock hit its lowest level in nearly three years, and pulled down shares in other German automakers such as Daimler (DDAIY) and BMW (BAMXY).
The models affected include the VW Jetta, Beetle and Golf from 2009 through 2015, the Passat from 2014-2015 as well as the Audi A3, model years 2009-2015. Owners of the "CleanDiesel" automobiles have filed a class action lawsuit against Volkswagen.
The company said it was not aware of any similar issues outside the U.S.
"At this stage it's only in the U.S., we know the tests are different in the U.S. and we also know we have never had any recalls over this issue in the U.K. and Europe," said Volkswagen spokesman Paul Buckett.
Authorities in Germany ordered the country's carmakers to come clean on the scale of emissions manipulation. "This is a case of blatant consumer deception and environmental damage," said Jochen Flasbarth, the German government's senior environment official.
Volkswagen's recent global growth has not been matched in the U.S., where the group's market share has shrunk to 2% from 3% in 2012, Lee said.
The U.S. accounts for just 6% of Volkswagen group sales, but the company had been banking on its diesel cars to give it a boost.
Volkswagen has enjoyed a reputation for reliability and quality engineering and that will be damaged by the scandal. The automaker could face fines of up to $18 billion -- or $37,500 for each car that did not comply with legal standards.
CEO Martin Winterkorn, who survived an attempt to remove him from his position earlier this year, apologized to customers on Sunday for breaking their trust.
Some analysts say his position at the top of Volkswagen may once again be under threat because of the scandal.
"No question that this is a big problem for Volkswagen and could lead to CEO Martin Winterkorn losing his job after all," said Christian Stadler, a professor at Warwick Business School.
The group's board is meeting on Friday to decide whether to renew Winterkorn's contract until 2018.
Federal and state regulators said Friday that the German company cheated on environmental standards by programming some diesel-fueled cars to turn on emission controls only when being tested.
Volkswagen, recently crowned the world's biggest carmaker by sales, also owns the Audi and Porsche brands.
The software is installed in nearly 500,000 cars on U.S. roads, including some of its luxury-brand Audi cars.
"The vehicles [with this software] would run 10 to 40 times more emissions than showing in the test," said Andrew Lee, an autos specialist at consultants Frost & Sullivan.
Regulators have ordered Volkswagen (VLKAY) to recall the vehicles. The company said it was halting sales of some cars in the U.S.
"This really does cast a negative light on Volkswagen, who are really well known in the industry for having very good mid-segment cars," said Lee.
Volkswagen stock hit its lowest level in nearly three years, and pulled down shares in other German automakers such as Daimler (DDAIY) and BMW (BAMXY).
The models affected include the VW Jetta, Beetle and Golf from 2009 through 2015, the Passat from 2014-2015 as well as the Audi A3, model years 2009-2015. Owners of the "CleanDiesel" automobiles have filed a class action lawsuit against Volkswagen.
The company said it was not aware of any similar issues outside the U.S.
"This really does cast a negative light on Volkswagen, who are really well known in the industry for having very good mid-segment cars," said Lee.
Volkswagen stock hit its lowest level in nearly three years, and pulled down shares in other German automakers such as Daimler (DDAIY) and BMW (BAMXY).
The models affected include the VW Jetta, Beetle and Golf from 2009 through 2015, the Passat from 2014-2015 as well as the Audi A3, model years 2009-2015. Owners of the "CleanDiesel" automobiles have filed a class action lawsuit against Volkswagen.
The company said it was not aware of any similar issues outside the U.S.
"At this stage it's only in the U.S., we know the tests are different in the U.S. and we also know we have never had any recalls over this issue in the U.K. and Europe," said Volkswagen spokesman Paul Buckett.
Authorities in Germany ordered the country's carmakers to come clean on the scale of emissions manipulation. "This is a case of blatant consumer deception and environmental damage," said Jochen Flasbarth, the German government's senior environment official.
Volkswagen's recent global growth has not been matched in the U.S., where the group's market share has shrunk to 2% from 3% in 2012, Lee said.
The U.S. accounts for just 6% of Volkswagen group sales, but the company had been banking on its diesel cars to give it a boost.
Volkswagen has enjoyed a reputation for reliability and quality engineering and that will be damaged by the scandal. The automaker could face fines of up to $18 billion -- or $37,500 for each car that did not comply with legal standards.
CEO Martin Winterkorn, who survived an attempt to remove him from his position earlier this year, apologized to customers on Sunday for breaking their trust.
Some analysts say his position at the top of Volkswagen may once again be under threat because of the scandal.
"No question that this is a big problem for Volkswagen and could lead to CEO Martin Winterkorn losing his job after all," said Christian Stadler, a professor at Warwick Business School.
The group's board is meeting on Friday to decide whether to renew Winterkorn's contract until 2018.
09-22-2015, 05:40 AM
#4
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09-22-2015, 09:11 AM
#6
Senior Member
They'll bounce back. Too many loyal customers. I see VW owners like Apple fan boys. Their sh*t never stinks.
But...Their stock may drop more before it gets better. I'd reserve some extra fundage in case it tanks a bit more.
But...Their stock may drop more before it gets better. I'd reserve some extra fundage in case it tanks a bit more.
09-22-2015, 10:51 AM
#7
Moderator
Let's assume you're correct in that it MAY bounce back. The stock will take an immediate dive. Federal suit won't come into play for a year or so. Then class action suit won't end for another few years. Until the numbers are finalized, the stocks will sit flatlined.
And since Stocker is like 55yo, he'll be needing a payout very soon.
And since Stocker is like 55yo, he'll be needing a payout very soon.
09-22-2015, 12:58 PM
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Vehicle: MC + RD2 + AW11 + 944 = 4x Win
I doubt VW is going under just over this. They may hurt for a minute and Fiat will no doubt claim victory in the coming months, but VW isn't going anywhere. They own too much to fall very far.
also,
UP Challenger #3985 
Iconic!
also,
Iconic!
09-22-2015, 04:46 PM
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Vehicle: 84 VW Rabbit, 01 Audi A8L, 08 VW GTI
I can see their stock getting even worse, but highly doubt this will kill VW.
Consider this:
EPA Testing has proved that VW TDI's get 40mpg with a compliant tune. Because obviously that have passed the testing in the past. The reason this is such a big deal is because during regular driving another tune is activated allowing the car to get better mpg but results in lot higher emissions. This would explain why so many TDI owners are so estatic about getting an average mileage higher than the EPA figures. Like I said before EPA MPG for the VW Passat TDI is 40MPG, Owners regularly get 48+MPGs. Back when I worked for the dealership TDI Owners would come in with 50-60MPGs averages reading on the dashes (Take account for errors and you still get higher than the EPA figures)
So to solve the issue VW needs to perform a recall by flashing the ECUs with ONLY the EPA Compliant Tune and it should be solved. The problem then would be TDI owners would be upset about getting lower mileage, But they should still be getting the EPA figures that are compliant with emissions.
So the bottom line VW Lied and cheated on the EPA Tests to get compliant results. But for what reason exactly?
Could it be because it would boost sales because people would be bragging about how their TDI gets much better than EPA figures thus boosting sales? Or so they could charge a premium for higher MPGs?
That's what I'm curious to find out, Although we will probably never know for sure.
The fine COULD be as high $37,500/vehicle or roughly $18B
Will it be that high? I doubt it.
The Ignition switch "Defect" recall resulted in a $900M fine for GM. GM knew it was a defect and tried to hide it...
VW probably isn't going anywhere. VW will be fined more for Cheating than Governmetent Motors was for hiding a defect that killed almost 200 people because $$$, but probably not the maximum $18B though.
TL;DR
General public thinks this
while forgetting this...
... and seem to have already forgetten this.
also this.
*Spoiler because pic is kind of annoying to look at lol
Consider this:
EPA Testing has proved that VW TDI's get 40mpg with a compliant tune. Because obviously that have passed the testing in the past. The reason this is such a big deal is because during regular driving another tune is activated allowing the car to get better mpg but results in lot higher emissions. This would explain why so many TDI owners are so estatic about getting an average mileage higher than the EPA figures. Like I said before EPA MPG for the VW Passat TDI is 40MPG, Owners regularly get 48+MPGs. Back when I worked for the dealership TDI Owners would come in with 50-60MPGs averages reading on the dashes (Take account for errors and you still get higher than the EPA figures)
So to solve the issue VW needs to perform a recall by flashing the ECUs with ONLY the EPA Compliant Tune and it should be solved. The problem then would be TDI owners would be upset about getting lower mileage, But they should still be getting the EPA figures that are compliant with emissions.
So the bottom line VW Lied and cheated on the EPA Tests to get compliant results. But for what reason exactly?
Could it be because it would boost sales because people would be bragging about how their TDI gets much better than EPA figures thus boosting sales? Or so they could charge a premium for higher MPGs?
That's what I'm curious to find out, Although we will probably never know for sure.
The fine COULD be as high $37,500/vehicle or roughly $18B
Will it be that high? I doubt it.
The Ignition switch "Defect" recall resulted in a $900M fine for GM. GM knew it was a defect and tried to hide it...
VW probably isn't going anywhere. VW will be fined more for Cheating than Governmetent Motors was for hiding a defect that killed almost 200 people because $$$, but probably not the maximum $18B though.
TL;DR
General public thinks this
while forgetting this...
... and seem to have already forgetten this.
also this.
Spoiler
09-22-2015, 06:54 PM
#10
Super Moderator
They cheated a system that is stupid, and nobody but the regulators and watermelon environmentalists actually think something BAD-BAD was done. The drivers still love their cars when they're out of the shop. VW will be fine.