Staggering under the impact that some of its diesel-fueled cars cheated on vehicle emissions tests, the Swiss government on Saturday banned Volkswagen AG from selling any more cars in the country that are included in what is known as the Euro 5 category. That leaves about 180,000 vehicles in dealer showrooms throughout Switzerland.
The German carmaker voluntarily stopped selling diesel-powered vehicles in the U.S. last weekend, but continues to sell gasoline-fueled cars. Volkswagen’s U.S. website continues to offer $500 owner loyalty bonuses on all models except the TDI clean-diesels and hybrids plus a variety of other financing deals.
VW has admitted that there are about 11 million diesel-power vehicles on the world’s roads that include a device that defeats auto-emissions testing equipment using software to reduce nitrogen oxide emissions when the car is on a test bed and switching to a more polluting operating level when the test is over and the vehicle is back on the road.
On Friday the company’s board attempted to lay the blame for the debacle at the feet of a small group of engineers and technicians responsible for the company’s engine development:
The test manipulations are a moral and political disaster for Volkswagen. The unlawful behaviour of engineers and technicians involved in engine development shocked Volkswagen just as much as it shocked the public. We can only apologise and ask our customers, the public, the authorities and our investors to give us a chance to make amends.
Bloomberg reported on Friday that unnamed sources familiar with Volkswagen’s U.S. operations said that company executives in Germany “controlled key aspects” of the faked emissions testing. The news service said that emissions testers at the company’s California site evaluate all the cars received from Germany and that results were sent back to Germany before being forwarded to the U.S. Environmental Protection Agency. Furthermore, Bloomberg reported:
If any vehicle failed to meet emissions targets, a team of engineers from Volkswagen headquarters or luxury brand Audi’s base in Ingolstadt was flown in, the person said. After the group had tinkered with the vehicle for about a week, the car would then pass the test. VW had no engineers in the U.S. able to create the mechanism that cheated on the test or who could fix emissions problems, according to two other people.
If more European countries follow Switzerland’s lead the company faces a massive hit to its business. Through August Volkswagen had sold about 62,000 diesel-powered vehicles in the U.S. so far this year. Sales in Europe are many times that total—about half of VW’s European sales involve diesel-powered vehicles.
Germany, Italy, France, Norway, and the U.K. have begun investigations, as have South Korea and Canada. The bad news has only just begun to rain down on Volkswagen.