Is there anything else under VW’s bonnet?

published 24 September 2015

150924-volkswagen — VW: is there more to come?

The scandal surrounding Volkswagen installing technology to get around emissions tests has forced the CEO to resign. Matthew Partridge asks if there's more to come.

What's going on?

VW's chief executive, Martin Winterkorn, has resigned, and the share price plunged by a third at one point, wiping $25bn off the company's value. Around 500,000 diesel cars sold in the US will have to be recalled, and VW has admitted that up to 11 million cars sold worldwide were fitted with the device (even though it was only intended to dodge US tests).

How much could it cost Volkswagen?

Criminal investigations have begun in both Germany and America, while it could face a barrage of lawsuits from customers who say that they were misled by the claims made about the cars' emissions. There is also the question about what this will do to the reputation of VW in general.

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Were any other carmakers involved?

The Independent claims that the report showed that "American models are much less safe when it comes tofront-side collisions, a common cause of accidents that often results in serious injuries". This report suggested that "trade negotiators would potentially be putting lives in danger by allowing vehicles approved in the US to be sold in Europe and vice-versa".

Are there any implications for German politics?

The German government has claimed that it didn't know anything about the specific issues at VW, but the opposition Green Party has pointed out that in July it acknowledged that "defeat devices" existed, and that there was little it could do to stop them being used to get around the law.

More generally, the UK and France have lobbied aggressively for a more lenient testing regime, despite concerns that it allowed firms to flaunt the regulations.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri