Can The Volkswagen Group Survive Dieselgate As A 12-Brand 'Behemoth'?

Illustration for article titled Can The Volkswagen Group Survive Dieselgate As A 12-Brand 'Behemoth'?
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1st Gear: The Time For ‘Nice To Have’ May Be Over

The Volkswagen Group is a massive titan of an automaker with 12 different brands, and not all of them are essential to the bottom line. In fact, most of them probably aren’t. So with the costs of Dieselgate mounting, and with new austerity measures in place as a result, Bloomberg wonders if some of those may be under review eventually:

While VW in the past could afford to prop up financially struggling divisions such as the Spanish Seat unit, Bugatti super-car nameplate and MAN heavy trucks with robust profit from Porsche and Audi, that money will now need to help cover costs linked to the crisis.

“VW has several brands that fall into the ‘nice to have’ category,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany, who estimates the scandal will cost VW as much as 30 billion euros ($34 billion). “Bugatti, Lamborghini, Ducati too — they’re not core to the company in terms of making money.”


The Veyron successor will continue as planned, but what about Seat, which hasn’t posted a profit since 2007, or the MAN heavy trucks unit?

2nd Gear: Lost Value Already For TDIs

Already in the U.S., Volkswagen diesel owners are facing lost resale value on their cars when they’ve tried to sell them, and dealer-to-dealer used car prices are down as well. Ouch. Via Reuters:

Auto industry consultant said on Monday the price of used VW diesel vehicles sold at auction by dealers to other dealers dropped 6.5 percent, based on Sept. 1-Oct. 9 data.

The average price of these cars fell to $10,586 after Sept 18, the day the scandal broke, from $11,319, said.

“The drop reflects a lot of the uncertainty and speculation that’s out there,” said analyst Jessica Caldwell.

3rd Gear: More Takata Recalls Maybe

Yep. Via Reuters:

National Highway Traffic Safety Administration (NHTSA) chief Mark Rosekind said his agency can add more auto manufacturers to the consent order that regulators announced with Takata in May. He said some car makers could also begin to move more quickly when they suspect a potential problem.

On Thursday, NHTSA expects to make a case in public that it should coordinate the Takata recall to ensure that an estimated 23.4 million air bag inflators installed in 19.2 million U.S. vehicles from 11 automakers are properly replaced.

“We’ll try to be very specific on Thursday but it goes beyond the 11,” Rosekind told reporters.



4th Gear: UAW Members Begin Voting

Today marks the start of Fiat Chrysler’s United Auto Workers union members voting on a new contract with their automaker. The last one was overwhelmingly rejected a few weeks ago, so we’ll see how this one goes. Via The Detroit News:

Since the new deal was reached just prior to a strike deadline on Oct. 7, there have been no large protests planned, social media chatter has cooled and talk on many factory floors is that the deal is far improved from the first contract that 65 percent of members with the automaker voted down.

“I am much more satisfied with this contract and I think the UAW did the best they could in the times we live in,” said Costell McIntosh, a second-tier worker with the automaker’s Sterling Stamping plant. “I also think that this shows that the union listens to its membership and tries to grant their wishes to the best of their ability.”


5th Gear: New Auto Jobs In Detroit, From India

Some good job news coming to the Detroit automotive world from an atypical place, reports The Detroit News:

India-based auto supplier Sakthi Automotive Group on Monday broke ground on a new multi-million-dollar manufacturing facility in southwest Detroit.

The planned 180,000-square-foot, $30 million plant at 6921 W. Fort is part of a larger campus encompassing the former Southwestern High School building and American Mailers Building. The manufacturing plant is expected to open in March and will employ 350 workers, including some ex-convicts returning to the workforce after incarceration.


There’s a Holden joke in that last sentence somewhere.


Reverse: Farewell PV


Neutral: Which VW Brands Will Have To Go?

Our offer to purchase Skoda stands!

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I hope they don’t have “too big to fail” in German vocabulary. If it ends up bankrupting VW, they SHOULD NOT be bailed out, and the debt should NOT be dischargeable! GM taught VW that it’s OK to cheat and that there are no consequences for fucking up.

VW should be required to buy back every single cheat car for the full price originally paid-in addition to any fines levied.