Carmaker Volkswagen (VW) is considering shutting down two German factories. They would be the carmaker’s first closures in its domestic market, says Jasper Jolly in The Guardian. The Wolfsburg-based manufacturer has informed its employee works council that it was looking at closing “at least one larger vehicle manufacturing plant and one component factory in Germany” in order to save billions of euros. These proposals underline the difficulties traditional European carmakers are having in “switching from profitable but polluting petrol and diesel cars to cleaner but currently less profitable electric vehicles”. 

Why is Volkswagen considering the closures? 

VW has been hit by unexpectedly poor demand for electric vehicles in Europe as well as a “shrinking market share in China, its most profitable market”, say Patricia Nilsson and Kana Inagaki in the Financial Times. However, its drastic decision to break with tradition has also been prompted by the fact that a savings programme launched last year has fallen short, with not enough workers taking up its offer of early retirement or redundancy. 

VW’s operating margins have therefore continued to fall, reaching 2.3% in the first half of 2024, far below the 6.5% target it aims to reach by 2026. Finalising the closures will be a “major test” for CEO Oliver Blume, say Monica Raymund and Christoph Rauwald on Bloomberg. Union clashes “felled a number of his VW predecessors”, who all left after they “tried to push through efficiencies”. 

Part of the problem is VW’s “labyrinthine governance system”. Management must gain the support of both the billionaire Porsche-Piech family and labour unions for major decisions. The fact that the Lower Saxony government owns a 20% stake is also a problem, as while it supports VW’s cost-cutting efforts, it also insists that “alternative options” to closures must be explored.

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In emerging markets, the alignment of societal and environmental development with robust financial growth offers attractive investments. Companies across diverse sectors, from electric vehicles to education and finance, are delivering valuable services while offering solid investment opportunities.

Three notable examples vividly highlight this encouraging trend.

1. Samsung SDI

The first is Samsung SDI (Seoul: 006400) in South Korea, a front-runner in the electric vehicle battery sector, reflecting a promising mixture of positive impact and financial growth.

The firm is a key beneficiary of the burgeoning demand for electric vehicles, propelling a vital global shift toward sustainable transportation. It is a battery supplier to key global carmakers such as BMW, Volkswagen, Audi and Volvo. The group’s estimated compound annual revenue growth rate between 2019 and 2024 is expected to be around 19%. Its superior technology and favourable valuation (the stock is on just nine times forward earnings before interest, taxes, depreciation and amortisation – Ebitda) relative to other leading battery manufacturers (such as LG Energy Solution at 16 times forward Ebitda) adds to its investment appeal. 

Moreover, as the US strives to diminish its reliance on Chinese suppliers, South Korean ones such as Samsung SDI are likely to benefit both in terms of exports and also through new manufacturing capacity investments in the US, either independently or through joint ventures with carmakers.

2. Laureate Education

Moving to the education sector, Laureate Education (Nasdaq: LAUR) – while headquartered in the US – operates primarily in Mexico and Peru. 

We believe private higher and vocational education have a role to play, primarily in emerging markets where limited public funds are best spent on primary education. Affordable higher and vocational education by private companies both play an important part in reducing income disparities and reducing the burden on public finances. Laureate is well-positioned to reap the benefits of US efforts to “nearshore” manufacturing.

The company’s prospective collaborations with corporations aim to bolster Mexico’s skilled workforce, aligning economic growth with societal advancement. Laureate’s solid free cash flow, robust balance sheet and attractive dividend yield of around 5% further underscore its investment appeal, all the while contributing to the vital task of developing education and skills in regions that crave educational advancement and an increasingly skilled workforce.

3. Shriram Finance

Shriram Finance (Mumbai: SHRIRAMFIN) is a compelling investment opportunity in India’s financial arena. Specialising in commercial-vehicle financing, the company facilitates economic activity by enabling essential vehicle acquisitions for small businesses, filling an important gap in the market where traditional banks have not been active.

Active for more than 40 years, Shriram Finance has established longstanding relationships with its clients. The company says that 70%–85% of the vehicles sold work either directly or indirectly in agriculture, most of them being used to transport food across the country. The firm generates a good return on equity (a key gauge of profitability) of 15%, and is one of the more attractively valued financial entities in India, trading on a price/earnings ratio of only 12 – stock valuations are generally high in India compared with other emerging markets.

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This material is not intended as an offer or invitation to purchase or sell any investment.

Thousands of diesel car owners are taking legal action after allegedly being misled about their car’s pollution’s level.

Some motorists who owned a diesel car between 2007 and 2020 are teaming up to take legal action against car manufacturers, claiming they installed devices into vehicles which led to reduced nitrous oxide emissions readings, leading them to believe their car’s pollution level was lower than it really was.

Manufacturers have denied the claims, but motorists claim results gave lower readings when they were in fact heavily polluting vehicles.

Back in 2015 Volkswagen admitted to installing “defeat devices”, which lowered a car’s nitrous oxide emissions reading”, with claims that consumers who had purchased these vehicles were mis-sold. VW paid out £193m to claimants, around £2,000 per person. Other manufacturers are also now facing legal claims.

You might be considering making a claim if you own a diesel car and believe you were affected, but what do you have to know beforehand? Legal claims come with significant costs, so it’s worth knowing all the specifics before filing one.

Which vehicles can you claim for?

Legal firms have said customers of the following brands might have been affected, but manufacturers deny this. They are Audi, BMW, Chrysler, Citroen, Fiat, Ford, Hyundai, Jaguar, Kia, Land Rover, Mercedes, Mini, Nissan, Peugeot, Porsche, Renault, Seat, Skoda, Suzuki, Vauxhall, Volkswagen and Volvo.

VW is the only one to have already paid out £192m to settle 91,000 claims in England and Wales. It includes its brands Audi, Seat and Skoda. But according to MoneySavingExpert, you might still be able to claim for these brands.

Are you eligible to make a diesel emissions claim?

Motorists in England and Wales who were the registered keepers of diesel vehicles or vans manufactured between 2007 and 2020 could be eligible to join a group legal claim.

Criteria varies, but law firms might accept you if your vehicle was:

• Bought new or second hand
• Leased
• If you had a company car and the contract was under your name

You don’t need to still be the owner of the vehicle. You can check your eligibility for free via the following law companies’ websites, according to MoneySavingExpert:

In England and Wales:

• For claims relating to Mercedes: Hagens Berman UK, Slater and Gordon
• For claims relating to other manufacturers: Leigh Day, Millberg London, Pogust Goodhead

In Scotland:

• Thompsons Solicitors Scotland and Slater Gordons provide guidance

In Northern Ireland:

• For claims related to Mercedes vehicles: Edwards and Co solicitors

Keep in mind that solicitors in Northern Ireland are not allowed to take on cases on a “no win, no fee” basis so you might be required to pay upfront.

Your claim has to be based on your suffering a financial loss due to any misrepresentation by the company about its vehicles’ diesel emissions. So for instance if you paid more because you believed you were buying an environmentally friendly car, or if it later had to be fixed to comply with emissions standards which led to poorer performance or a lower resale value.

As their payment, law firms will take a percentage of any compensation. The maximum they can claim ranges between 30-50%. You can only sign up with one law firm per vehicle.

You can also only join a claim for the country where you bought or leased the vehicle, regardless of where you live. Rules will vary in different parts of the UK. If you bought your vehicle outside the UK, you will not be eligible.

How can I make a diesel emissions claim and how long will it take?

The most straightforward option is to look into joining a claim, as independent litigation can be very costly. Adverts will ask you to join other diesel vehicle owners in their claims against manufacturers.

Several law firms have dedicated web sites for you to submit details of your vehicle to figure out whether you’re eligible. Cases have been going on for some years now – if you’re thinking about making a claim you might want to wait until there is a court judgement against a manufacturer as you can then make a claim yourself.

If you are interested in making a claim make sure you do your due diligence on the law firm of your choosing and that you keep on top of updates.

Additionally, a claim can take up to five years or longer to be processed so don’t expect the payout to be quick.

What to keep in mind when choosing a law firm

Do your research before you sign up. You can look at reviews on sites such as Trustpilot which will give you an idea of what they are like. Some firms might be better reviewed than others when it comes to emissions claims specifically.

Online forums and social media groups made for and by motorists pursuing claims might also be a useful source of information.

What are the risks involved in making a diesel claim?

Firms are working on a “no win, no fee” basis (except potentially for those in Northern Ireland) so there won’t be an upfront fee.

But if the claim fails, there could be legal costs if the firm doesn’t have “after the event insurance” so make sure you clarify when signing up that you have this cover. Also ask for any legal costs you might have to pay before you sign up.

If you change your mind you have a 14 day cooling off period after you sign up. During this time cancelling is straightforward. Afterwards it will require more paperwork and might involve fees. Make sure you carefully go through any paperwork when you receive it. Keep all communications with the firm in writing too.

What happens if the claim proceeds?

If your claim proceeds you might be asked for additional information detailing proof of ownership or financial agreements. A full witness statement or attending court is unlikely to be necessary.

How much could I receive from a successful diesel claim?

VMW’s payouts have been in the thousands but this isn’t guaranteed. What you receive is difficult to predict.

Even if your firm believes you’re eligible for compensation the amount could be reduced by the court. A lower amount could be paid out if the case is settle outside of court.

Should I file a diesel claim?

This is ultimately up to you. It’s important to know the pros and cons of making a claim, and to be aware there is no guarantee you will be successful.

Also keep in mind you might have to pay a fee if the claim fails and your law firm doesn’t have insurance.

Finally, ask yourself if you genuinely suffered a loss as the process is years-long and there is no guarantee of a win.

Until the end of last week Herbert Diess looked “every inch the modern, global auto titan”, say John Arlidge and Jon Yeomans in The Sunday Times. However, the CEO of Volkswagen was evidently “too brash, too bold and in too much of a hurry for many of the company’s key stakeholders”. VW announced that he had been forced out three years before the end of his contract by a unanimous vote of the carmaker’s supervisory board. The move has upset many institutional shareholders, with analysts calling it “another illustration of dysfunction at VW”.

Diess’s departure was at least partly the result of “a series of public blunders”, says Joe Miller in the Financial Times. These include saying he was “not aware” of detention camps in China’s Xinjiang region and using the insensitive phrase “EBIT macht frei” at a company event. He also gained “notoriety” for his “skirmishes” with VW’s “powerful works council, which controls several seats on the company’s supervisory board”. Unions were particularly “angered” by his suggestion that the group had 30,000 excess staff and his complaints that Tesla employees managed to produce an electric car in just a third of the time it took VW.

Clashes with the workers

Diess’s gaffes and “frequent clashes with powerful worker representatives” may have played a role in his departure, but they were survivable as long as he had “unwavering support” from the billionaire Porsche and Piech family, the majority owners of VW, says Monica Raymunt and Christoph Rauwald on Bloomberg. However, his “key project failures” gradually persuaded the family that “he had to go”. These failures include delays to the “scheduled rollout of important new models, including the electric Porsche Macan SUV” as well as struggles “to muster broader support” to implement a €89bn electric-vehicle (EV) and software strategy.

Still, even his harshest critics acknowledge Diess’ “strategic vision” and his “achievement in transforming VW’s culture for the [EV] age”, say William Boston and Georgi Kantchev in The Wall Street Journal. His emphasis on moving away from fossil fuels “has seen VW’s brands, including Porsche, Audi, Seat... and Bentley develop core electric models with a plan to shift fully to EVs this decade”.

The change at the top “probably won’t derail Volkswagen’s electric vehicle ambitions”, especially since Porsche – under VW’s new CEO Oliver Blume – “has rolled out the successful Taycan model and expects green vehicles to be as profitable as combustion engine cars in two years”.

A “fresh start” may even help Blume persuade the wider company to raise investment in EVs “while improving lacklustre profitability”. But Blume’s appointment could muddy Volkswagen-Porsche’s already complex governance: he will still be in charge of Porsche even though Volkswagen plans to list the luxury brand. If this set-up produces a “greater muddle”, investors “may start to miss... Diess’s gaffes”.

Tesla is roaring ahead, says Lex in the Financial Times. Sales reached almost $12bn in the second quarter, nearly double the level of a year ago, while operating profits tripled to $1.3bn. Tesla “benefited from higher sales volumes and reined in its operating costs”. Tesla also seems optimistic about the future, as it has already announced “robust” deliveries of new vehicles for the second quarter, despite supply-chain problems.

The latest figures suggest that Tesla “has finally joined the grown-ups”, says Antony Currie on Breakingviews. Its pre-tax profit margin of 11% rivals Toyota and General Motors (GM). Still, this doesn’t mean the shares are worth buying. They look wildly overvalued at 115 times forward earnings. Meanwhile, the group is facing growing competition from both “established manufacturers”, such as Volkswagen, Ford Motor and GM, and “young start-ups” such as Lucid. Tesla may have avoided the fate of other electric carmakers, such as Faraday Future, Fisker Automotive and Lordstown Motors, which either went bankrupt or failed to break through, but even CEO Elon Musk accepts that Tesla’s future may not be as rosy as its past, says Io Dodds in The Daily Telegraph.

He warned against complacency, cautioning that “the seeds of defeat are sown on the day of victory”. In particular, he admitted that Tesla was vulnerable to further supply-chain pressures, while Tesla continues to experience “repeated turbulence” in China due to a series of protests by consumers about “alleged safety errors”.

Electric-vehicle manufacturer Tesla (Nasdaq: TSLA) has epitomised the boom in tech shares. Despite predictions from a range of pundits that the surging stock was about to slump, it has gone from strength to strength, while the group has started turning a profit. Each of my three recommendations that you short it, in March 2017, April 2018 and March 2019, has lost money. Even though Tesla’s shares have fallen after CEO Elon Musk’s foray into bitcoin, they have still risen 17-fold in two years.

Nevertheless, there are some solid reasons to think that the share-price surge may be overdone. Firstly, the enthusiasm for electric cars among governments around the world, with the UK announcing last November that it planned to ban the sale of petrol and diesel cars from 2030, is a double-edged sword for Elon Musk’s company. This is because the car industry is now pouring billions of dollars into its own models, with General Motors alone announcing at the start of this year that it is going to invest $27bn in electric-vehicle development.

Rivals are catching up

Perhaps the strongest potential competitor is Volkswagen (VW), which is winning plaudits for its new generation of electric vehicles. VW already has ambitious plans to overtake Tesla in the number of electric vehicles that it sells. Meanwhile, car companies are also becoming more environmentally friendly in terms of the amount of carbon that is produced during the manufacturing process. This is important because Tesla currently makes the vast majority of its profits from selling carbon credits to companies such as Stellantis (formed out of the merger between PSA and Fiat Chrysler), which recently announced that it would stop buying credits from Tesla.

Even if Tesla can find someone else to buy its carbon credits, its valuation seems excessive. Its current market capitalisation of £427bn means that it is worth seven times more than General Motors and more than Toyota, Volkswagen, Daimler and Ford put together. Another sign of its overvaluation is a 2022 price/earnings (p/e) ratio of 101 and a multiple of 16 times current sales, figures that would seem excessive for an internet start-up, let alone a capital-intensive car company likely to find it very hard to scale up its production to the levels that would justify such a valuation.

Tesla’s share price has declined by nearly 30% from its peak at the start of this year, which suggests to me that investors are finally beginning to turn sour on the company. So I would recommend going short against Tesla for a fourth time at the current price of $637. However, given Musk’s ability to move markets in both directions, I would suggest that you do so at £3 per $1, and set a stop-loss at $967, which gives you a total downside of $990.

Trading techniques: dividends deliver

Last year was brutal for income investors. More than half of the companies in the FTSE 100 decided to cut, defer, or even cancel their payouts to shareholders. In some cases this was a voluntary measure in order to conserve cash during a time of uncertainty. In others, notably in the banking sector, pressure from regulators prompted companies to act. The outlook has improved, however. Investment platform AJ Bell notes that while a few companies have cut dividends so far this year, all the indications suggest that listed firms will be increasing them by around a fifth in 2022.

But what might this mean for share-price returns? In theory a firm’s decision to increase dividends should have a neutral impact on share returns, since any money that the shareholders receive will be balanced by the fact that a company has less money to pay down debt or put back into the business.

Some people even argue that it could be a negative sign that the company is running out of ways to reinvest money profitably. However, increasing dividends are usually seen as a positive sign: the company is generating plenty of cash. A study by Jason Turkiela of the University of Oregon in 2014 of a sample of US equities between 2002 and 2012 found that the decision to increase quarterly dividends did lead to a higher share price in the next few days, although most of the rise took place in the first day. Another analysis by Ned Davis Research and Hartford Funds found that between 1973 and 2020, $100 invested in an index of firms that had either increased their dividend or started paying one in the previous year, would have grown to $11,346, compared with $3,764 for the S&P 500. But $100 invested in those who had cut or eliminated their payout would have shrunk to $56.

How my tips have fared

In the past six weeks three of my six long tips have risen. Media group ITV climbed from 122p to 128p, cruise-ship operator Norwegian Cruise Line increased from $27.97 to $31.90 and construction firm Morgan Sindall Group went up from 1,918p to 2,205p.

However, US housebuilder DR Horton fell from $95.72 to $95.29 and spread-betting firm Plus500 declined from 1,514p to 1,511p. What’s more, while transport group National Express fell from 309p to 304p, it dipped below 290p, the level at which I suggested that you close your position. Overall, then, my long tips (counting National Express) are making a total profit of £6,619, up from £6,380,

My short tips are also a mixed bag, with three appreciating and two falling. Electric-lorry manufacturer Nikola increased from $10.29 to $14.96, cloud-computing specialist Snowflake went up from $230 to $238 and hydrogen-fuel electric-vehicle maker Plug Power increased from $25.24 to $30.70.

However, online grocery firm Ocado fell from 2,059p to 1,889p. Bitcoin also fell below the $40,000 level at which I suggested that you started shorting it, and is currently at $34,132. In total my shorts are making profits of £2,561, up from £2,380.

I now have five long tips (ITV, Norwegian Cruise Line, Morgan Sindall, DR Horton and Plus500) and five shorts (Nikola, Snowflake, Plug Power, Ocado and bitcoin), which is a good balance, so I don’t recommend closing any more positions.

However, I would increase the stop-loss on DR Horton to $64 (from $63). I also suggest you reduce the level at which you cover Snowflake to $410 (from $420) and cut the price at which you cover Nikola to $22 (from $23).

1. Which prominent Japanese car manufacturer, which employs 6,000 people in Sunderland, has recently announced plans to continue its UK operation post-EU trade deal?

• a. Nissan
• b. Hyundai
• c. Honda
• d. Toyota

2. Which video-streaming service, which saw spectacular growth during the pandemic, made an annual profit of $25bn and has accrued a total of 203.6 million subscribers?

• a. Apple TV
• b. Amazon Video
• c. Netflix
• d. Hulu

3. Which prominent Chinese entrepreneur resurfaced this Wednesday after a three-month hiatus, following the halting of his firm’s $37bn IPO?

• a. Softbank’s Masayoshi Son
• b. Ant Group’s Jack Ma
• c. Tencent’s Ma Huateng
• d. Samsung’s Kim Ki Nam

4. In place of the usual crowds, missing because of the danger of spreading Covid-19, US President Joe Biden’s inauguration filled America’s National Mall with 200,000 of what objects representative of ‘American unity’?

• a. McDonald’s Big Macs
• b. Flags
• c. Olive branches
• d. Lit torches

5. Which prominent airline has reported a $33m daily cash burn, and $1.9bn loss in the fourth quarter of 2020?

• a. United Airlines
• b. British Airways
• c. Ryanair
• d. American Airlines

6. Which German car company boasted an annual profit of £12.bn for 2020, despite the Covid-19 pandemic?

• a. Volkswagen
• b. BMW
• c. Porsche
• d. Audi

7. Which European country surpassed the highest monthly borrowing figure on record for December after borrowing £34.1bn?

• a. Germany
• b. France
• c. United Kingdom
• d. Greece

8. Which high-flying CEO has recently acquired two Texan oil rigs for the price of $7m to serve as launch pads for their developing space programme?

• a. Jeff Bezos
• b. Richard Branson
• c. Elon Musk
• d. Mark Zuckerbeg

9. Which mortality-conscious American real estate mogul has recently offered scientists $1m in prizes to prove the existence of life after death?

• a. Donald Trump
• b. Robert Bigelow
• c. Donald Bren
• d. Sam Zell

10. The price of which controversial cryptocurrency dropped below $30,000 this week?

• a. Ethereum
• b. Litecoin
• c. Ripple
• d. Bitcoin

Answers

1. a. Nissan. Following the trade deal between the UK and EU, Japanese car manufacturer Nissan has reported plans to secure its UK manufacturing plant in Sunderland, guarding 6,000 local jobs.

2. c. Netflix. Making a $25bn, streaming giant Netflix reported it had hit a total of 203.6 million subscribers during 2020, as consumers turned to the entertainment service during the pandemic.

3. b. Ant Group’s Jack Ma. Ant Group CEO Jack Ma returned to the limelight after three months, in a video praising China’s teachers.

4. b. Flags. Because of concerns that crowds would spread Covid-19, US President Joe Biden’s inauguration was performed to a background of 200,000 flags representing the 50 states and 5 territories of the USA.

5. a. United Airlines. The US carrier has recently pledged to cut costs to keep the airline aloft, after a disastrous fourth quarter of 2020 resulted in a $1.9bn loss .

6. a. Volkswagen. VW has made a £12.2bn annual profit for 2020, despite a 15% fall in worldwide vehicle deliveries; strong demand in China helped it rebound from the pandemic.

7. c. United Kingdom. The UK borrowed more money last month than in any December on record – £34.1bn, taking the total borrowing for the financial year to £270.8bn.

8. c. Elon Musk. Space X and Tesla CEO Elon Musk plans to use the rigs to expand his privatised space-programme off the coast of Boca Chica, Texas.

9. b. Robert Bigelow. Bigelow was inspired by readings by “psychic” George Anderson after the suicide of his son and grandson in 1992 and 2011 respectively.

10. d. Bitcoin. Bitcoin’s price briefly crashed to below $30,000, wiping $200bn from its value in the last two weeks.

If you found the Bugatti Chiron sluggish, the French carmaker has a new model for you. Chris Carter reports

For most drivers, 262mph is quite sufficient, says Charlie Turner in Top Gear. But while the top speed of a regular Bugatti Chiron is indeed fast, it isn't fast enough for the hypercar world. There, "being the fastest takes on a whole new importance". Even then, "being the fastest is not the right expression", Bugatti's Stefan Ellrott tells Turner. "Moving boundaries would be better," he says. "Right now, the 300mph barrier for a hypercar is the boundary we would like to achieve." So, they did.

Last month, a Bugatti Chiron Super Sport 300+ Prototype was clocked at 304.77mph at Volkswagen's Ehra-Lessien track in Germany. It didn't set an official speed record for a production car for that you need to drive in both directions and submit the average. The Chiron was also just a prototype. The record, however, is not the point, says Turner. "No owner will ever find the space to drive this fast, but the depth of engineering required to propel man and machine at this velocity oozes out of every pore of the regular' Chiron." As for the second quibble, the production car is on the way.

It will be powered by a tuned version of the original Chiron's quad-turbo 8.0-litre W16 engine, producing 1,578bhp, says Luke Wilkinson in Auto Express. The Super Sport 300+ will also have the lowered suspension system of the prototype, uprated brakes, a new set of lightweight magnesium-alloy wheels and a tweaked quad-exit exhaust system. Prices will start from €3.5m, with the first cars delivered in the summer of 2021.

For the past few years Volkswagen AG (Frankfurt: VOW) has been trying to escape the shadow of the 2015 emissions scandal. The German carmaker was forced to confess that it had fitted devices to its diesel cars allowing them to cheat on emissions tests. This led to a blizzard of lawsuits, fines, a temporary halt to sales for certain lines, and even the arrest of Audi CEO Rupert Stadler last year. As a result, Volkswagen's (VW) share price is still 40% down from its pre-crisis peak in March 2015.

The smog is lifting

Recently, however, there have been two good pieces of news for the company. Firstly, it has continued to make progress with mopping up the remaining legal liabilities from the scandal, agreeing to settle a class-action lawsuit in Australia brought by customers who bought its cars before the deception was revealed. While it is still facing lawsuits in other countries, the indications are that the remaining liabilities are a fraction of the tens of billions of euros already paid out. VW says it has set aside enough money to cover these claims.

In addition to making reparations for its misdeeds, VW is getting into pole position to take advantage of the electric-car revolution. Earlier this month Porsche (which is owned by VW) released the Porsche Taycan, an all-electric roadster that aims to challenge Tesla on its core territory of luxury high-performance cars. The Taycan also won rave reviews from the motoring press, which sees it as a game changer for the industry. Nor has VW neglected the mainstream end of the market. The recently unveiled ID.3 (which can drive up to 550km on a single battery charge) shows that VW's £27bn investment in electric cars is paying off.

Of course, the main attraction of VW's stock is its extremely low valuation: 5.5 times 2020 estimated earnings. It also trades at a 30% discount to its book value (net assets). With sales increasing at around 3% a year and VW making a return on equity of slightly more than 10% this seems unduly pessimistic.

The combination of a rock-bottom valuation, diminishing legal risk and a range of compelling products means you should go long on Volkswagen shares with IG Index at their current price of €162 at £25 per €1. In case the price slides, however, set a stop-loss at €22, which would give you a total downside of £1,000.

Trading techniques: Darvas Box Trading

Box trading was a strategy developed by the dancer-turned-trader Nicholas Darvas, who wrote about it in the 1960 book called How I Made $2,000,000 in The Stock Market. As the book's title suggested, Darvas claimed that his system, along with some fundamental analysis to spot industries with plenty of growth potential, helped him make $2m in the stockmarket during an 18-month period in the late 1950s.

The idea is that shares tend to trade within a certain range, or box'. The upper and lower bounds are determined by the highs and lows within a certain period, such as 52 weeks. Darvas' theory is a momentum-based strategy, which involves looking for stocks that are bursting out of the box by making new highs or lows. Provided a rise was accompanied by an increase in the volume of stock traded, and didn't reverse within a few days, Darvas would start buying the stock. To protect himself, he would place a stop-loss order that would automatically sell a stock if it fell below the lower boundary of the box.

Like all chart-based theories, Darvas Box Trading involves a degree of subjectivity. It is up to the trader where exactly to draw the lines of the box and decide what constitutes a significant' breakthrough. New York regulators also accused Darvas of exaggerating his profits (although they failed to get his book banned).

However, a 2004 study by Thomas George and Chuan-Yang Hwang of the University of Houston, which looked at US stocks between 1963 and 2001, found that those making new 52-week highs tended to outperform the market, while those making new lows underperformed.

How my tips have fared

My long positions have had an extremely successful fortnight. Five out of six buys have gone up in value. Safestore, which fell marginally, from 648p to 644p, was the only one to decline.

By contrast, Superdry went up from 392p to 429p, Bausch Healthcare from $21.34 to $23.28 and JD Sports from 626p to 718p.

Bellway also moved upwards, from 2,961 to 3,268p while Ted Baker, our latest tip, went from 929p to 1,043p.

The long tips are now making a collective profit of £3,184, the most that they have made since this column's inception.

Of course, every silver lining has a cloud, so it should come as no surprise that four out of five of my short tips have also advanced.

Weis Markets moved from $38.23, Tesla increased from $225 to $285 and Bitcoin went up from $9,895 to $10,136.

Uber also appreciated, from $32.57 to $34.64. The only one of my short tips to decline was Netflix, which fell from $294to $292.

Nevertheless, the fact that most of the increases were relatively minor means that my current short tips are still in the black, making a collective profit of £667.

Counting the latest tip, I now have seven long open tips and five short tips. While I don't want to close my JD Sports recommendation just yet, I suggest that you take some profits off the table by increasing the stop-loss to 675p.

I also think it would be advisable to increase the stop-loss on Safestore to 600p. Beyond Meat remains far above the $120 that I suggested as the price at which you should start shorting it.

As a result, I have concluded that it's time for me to cancel the Beyond Meat short entirely though I may come back to it in the next few months if the stock begins to fall.

Car sales in Germany slumped by 30.5% compared to the same month last year, I read this morning on Twitter.

Worryingly for the German giants, Audi was down 77.7%, Porsche 75.5% and Volkswagen 61.9%.

If my own experience is anything to go by, further falls lie ahead.

I'm getting more and more interested in the future of urban transport systems, as the asset-light generation Generation Rent, the generation which prizes experience over material things, and does not want the hassle of ownership comes into prominence.

I got a little taster at the weekend of what lies ahead.

You really don't need to own a car anymore

Let's start with a little bit of back story.

I acquired my first car in 1987, when, as a sprightly lad of 17, I passed my driving test at the second attempt. My mum gave me her car so she could buy a new one.

During the 2000s, however, the costs of owning a car began to nag away at me. There were the constant incidental payments parking, insurance, fines.

And then there was the fact that whenever I bought a car, the Parker's or Glass's guides always seemed to suggest that the value of the car was below what I was having to pay; yet whenever I sold, those same guides always suggested it was worth more than the price for which I was able to sell.

I was also always conscious of the stat maybe an urban myth that you could get taxis for every journey you make in a car and, over the course of a year, it would still work out cheaper.

Meanwhile, as I got older (and was working out of town less and less) I was using the car less and less. The value it offered seemed to be constantly shrinking.

The last car I owned a beautiful Mercedes convertible, don't you know I ended up leasing, and when the lease ran out, I didn't get round to leasing another straight away.

In the meantime, I started using Uber. This is rather convenient, I thought. I began sending Uber to pick up my kids. The 20-minute drive to get a son from footy or a daughter from friends, the waiting in between, and the 20-minute drive back meant I kept losing large chunks of my day.

Uber got me the time back. I could track exactly where they were and who was driving them at any given moment, so safety was not an issue. Over the course of a year, it worked out cheaper.

When I needed a car myself, I could use the Zipcar parked opposite my house, or I could schlepp over to the car hire place and rent one. So I never got another car.

This schlepp started to get on my nerves, however. The nearest car hire outlet is about two or three miles away; they only come and pick you up when they're not busy; the admin always seems to take an age; there were often queues; you had to go through the same rigmarole when you returned the car; and you were limited by their opening hours.

The other day I had to drive to Leicester and back. To avoid the car hire place, I used Zipcar, but then I got hit with a large charge because I went so far over their (to be fair, clearly stated) 60-mile-a-day limit. That irritated me.

I quite like Zipcar, but it's designed for short-term, short-distance hire. There has to be something better, I thought, a way of hiring a car for a longer-distance drive over , say, a weekend that doesn't necessitate me having to go the car hire place. But I never seemed to be able to find anything. (I know I am massively behind the curve on this.)

However, this weekend I had to drive to Devon, so I searched again. This time an ad for a company called Drivy popped up.

My experience with AirBnB for cars

This looks interesting, I thought. It's basically AirBnB for cars a peer-to-peer, car-hire platform. If you own a car, but perhaps don't use it all the time, you can put it up for hire through the Drivy platform. There are all the vetting procedures you would expect, plus there is a user-review system that ensures high standards.

To my surprise, there were all sorts of cars advertised within half a mile of my house, all available at short notice. I only skim read the list, but I noticed a BMW 5 series and a Fiat 500 so there's a good range, from big to small. I went for a Kia Optima Sportswagon, because it seemed cheap (£105 for three days), was parked only about ten minutes' walk away, and I'd never driven a Kia before.

I registered with the site, was approved and booked the car within a few minutes. I was able to start the hire at 11:30 at night, which I liked (I wanted to have the car parked outside my house and be able to leave at the crack of dawn the next day).

Just before the hire, I got a notification from the Drivy app. It linked to both Google and Apple Maps, so I was able to find the car easily, parked up a side road. The app on my phone opened the car. The keys were inside. I was then instructed to photograph the car inside and out and the app uploaded the photos to HQ. This took no more than a minute, and I was good to go.

The car had only done 9,500 miles. It was immaculately presented. It drove beautifully and economically. I am now a Kia fan, and would buy one were it not for the fact that I have no intention of ever buying a car again.

Three days later I returned the car once again at 11:30 at night. You had to return the car with the same amount of fuel as you took it (or pay the difference) and you had to return the car in a presentable state (or pay a cleaning fee). I did both, drove the car back where I had found it, photographed the outside, uploaded the photos, left the keys inside, hit "end rental" on the app and the car automatically locked.

Shortly after, an email arrived telling me that I had checked out successfully. I was also sent an adjustment bill as I had gone over the 100-mile-a-day limit (17p a mile about a third less than Zipcar, which also has a lower daily limit). All-in-all it was a lot more convenient than the car hire place.

What does this mean for the future of driving?

There are several takeaways from this. First, I now feel even less need to buy a car than I did. Others will feel the same way. This is another step forward for the so-called sharing economy. (When cars go driverless, even fewer people will buy.) Car ownership, especially in cities, will continue to fall.

Second, if you do own a car, but don't use it all the time, then you should sign it up to a peer-to-peer car hire company (Drivy is not the only one) and get it working for you. If I had a forecourt of some kind, and was that way inclined, I would buy several vehicles and sign them all up.

I've no doubt we will see many people doing this as they wake up to the opportunity. The platform has created opportunities for ordinary inclusion in the car rental business.

Finally, peer-to-peer car hire companies (for example, EasyCar, Drivy, Turo, Hiyacar) are, surely, going to do to traditional car hire firms what AirBnB has done to the hotel business. It's one of those transformations, I guess, that will be gradual, then sudden.

Enterprise (which also owns Alamo and National) is privately owned, but Hertz (NYSE: HTZ), which also owns Dollar Thrifty, and Avis (NYSE: CAR) cool ticker! are both listed. I would not want to own either in my portfolio. Longer-term, they are probably a short. If peer-to-peer car hire can get in on the airport game, they almost certainly are.

As emissions caps choke demand for diesel vehicles, electric cars will start motoring. Buy lithium miners and battery makers to cash in, says Julie Boote of Pelham Smithers Associates.

Last month the government announced plans to ban the sale of new petrol and diesel cars in the UK from 2040. The French had already made a similar move, and even the Germans are discussing phasing out fossil-fuel-powered vehicles. While the demise of diesel after the emissions-rigging scandal known as "dieselgate" was perhaps inevitable, the idea that petrol cars are also on the ropes may seem premature. Yet the reality is that the days of the internal combustion engine are numbered and you should invest accordingly.

A market created by regulators

A decade or so ago the electric-vehicle market barely existed no one wanted one and very few were made, barring a few luxury models, such as the Tesla Roadster. However, as emissions regulations in both the US and Europe became tougher (and potential fines larger), car makers realised that one way to cut their fleets' average emissions of carbon dioxide (CO2, the key greenhouse gas) was to introduce more all-electric vehicles, or plug-in hybrids (which still have a small combustion engine and petrol tank). In 2010 there were two electric or plug-in hybrid vehicles available in the US now there are 35. In Europe in 2011 the Nissan Leaf was the only electric vehicle available now there are 20.

Now a further "big push" is coming, triggered by two developments. First, dieselgate. Diesel is far more polluting than test results had suggested, so diesel cars will now need to be fitted with more costly exhaust controls. That will drive up the price of diesel cars and choke off demand. That leaves manufacturers with a problem diesel engines emit too much harmful nitrogen dioxide (NO2), but they emit far less CO2 than petrol cars. As a result, diesel sales have been key to hitting fuel-economy targets. That means sales of other fuel-efficient vehicles electric cars and hybrids must rise to compensate.

Second, both California and China now demand that manufacturers sell a fixed number of zero-emission vehicles each year. From next year, car makers must generate green credits related directly to the level of electrification in their fleet equivalent to 8% of their sales in China, rising to 10% in 2019, and 12% by 2020. Manufacturers could gamble that these quotas will fall by the wayside President Trump wants to remove California's ability to set its own emission standards, while China has been asked to postpone quotas by German chancellor Angela Merkel. But it's unlikely that most will take the risk of endangering these markets.

As a result, car manufacturers are accelerating research and development projects and announcing ambitious targets for both sales and new launches. VW, for example an opponent of electric vehicles prior to dieselgate has plans for 30 new pure electric vehicles across the VW group (with brands including Audi, Skoda and Porsche) by 2025. Toyota and Honda, early adaptors of hybrids (which only have small electric motors and don't require recharging), are also now embracing pure electric cars and plug-in hybrids (which have larger electric motors and do require recharging).

Meanwhile, Volvo grabbed headlines with a promise that all of its new models would come with an electric motor from 2019. And Tesla the poster child of electric-car development hopes to ramp up its sales with the introduction of the Model 3, which reportedly has secured more than 450,000 orders so far.

Who will buy all these cars?

So if manufacturers' targets are achieved, we should have tens of millions of electric vehicles on the road within the next five years. But where will the demand come from? Last year, sales of electric or plug-in hybrid vehicles accounted for just 1.1% (151,000) of total vehicle sales in the European Union; 0.9% (158,000) in the US; and 2.1% of passenger car sales in China (about half a million). Overall, global sales came in at around 950,000 out of a total of 90 million. So in absolute terms, the numbers are still very small. However, there are four reasons why that looks set to change.

Better batteries

The heart of an electric car the quality, performance, and cost is its battery. All of the negatives related to electric cars, from long charging times to short driving ranges and high prices, are due to the short-comings of batteries. Yet as I'll discuss more below, all of these issues are likely to be addressed in the near future.

Improved infrastructure

Governments might have pushed manufacturers into selling more electric vehicles, but they are also delivering on their side of the deal providing a network of charging stations. In the UK, there are 3,791 publicly funded charging devices, or 6,500 including commercial chargers, according to the National Chargepoint Registry. That compares with 8,500 petrol stations, and the gap is set to close entirely by 2020. EU regulations also now require that all new houses built from 2019 must have charging points.

The rise of the plug-in hybrids

Plug-in hybrid cars offer a halfway house towards full electrification. They have a small petrol tank so no concerns about running out of charge and while they are not zero-emission vehicles, they are very fuel-efficient and are included in subsidy schemes and government sales targets. There are also growing numbers of SUV and light truck versions available models such as the Mitsubishi Outlander have proved very popular.

A big marketing push

It is very much in car manufacturers' interests to promote electric vehicles heavily, given the major investment they have had to make in them. So expect to see big marketing campaigns, focusing on the benefits of environmentally friendly vehicles. Intense media coverage should also help sales.

Overall, our estimates at Pelham Smithers Associates indicate that total annual electric and plug-in hybrid sales should reach 1.17 million this year, rising to 5.9 million in 2021. From 2022 onwards, improved infrastructure, battery technology and the advent of self-driving cars (see below) should lead to a surge in demand, with sales reaching 22.5 million (20% of total global sales) by 2026. So demand should rise over the next five years, but it probably won't explode. Yet fuel economy still needs to improve to lower CO2 emissions. So what's the solution? Electrification adding a battery and electric motor to a regular internal combustion engine with hybrids largely replacing diesel.

Who will benefit during the transition?

On this front, Toyota (Tokyo: 7203) should be a clear beneficiary due to its dominance in "full" hybrid vehicles (which don't need to be plugged in, unlike plug-in hybrids). These now account for 40% of Toyota's European sales, and this is only likely to increase, with all of Toyota's models now offered in hybrid versions. Demand for SUVs in particular, which are less fuel-efficient than smaller models, and thus gain more from being electrified, is set to grow. Japan has already fully embraced hybrids, and they are making progress in China.

Toyota is also staying on top of future challenges to the industry such as driverless vehicles by aggressively venturing into new business areas (including artificial intelligence, robotics, connectivity, mobility services, Big Data and the like). These efforts should ensure that Toyota remains in a strong position as a vehicle-technology services provider as the market evolves.

A purer play on the changing vehicle industry is UK-based engineering and environmental consultancy Ricardo (LSE: RCDO), which specialises in transport and energy. Between stricter emissions targets, fleet electrification, and all of the changes implied by increasingly autonomous vehicles, demand for specialist advice will only increase. Ricardo has the in-house engineering capabilities for complex products (ie, engines, electric motors, generators, battery packs), and also offers its services to assist with strategy development, safety management and environmental-impact assessments. The company focuses particularly on "low carbon" developments, as well as autonomous and connected vehicles.

Ricardo's appeal is that it is exposed to several growth industries, without facing the risk involved in investing heavily in production facilities. The UK accounts for 42% of its revenues, which could be behind recent share-price weakness (UK car sales have started to decline). However, the big-picture developments (what Ricardo calls "mega-trends") should prevail, and medium- to long-term growth should be supported by its growing presence in the rest of Europe and China, as well as surging demand for expert advice in the transport, energy and resources sectors.

The battle of the battery makers

As for pure electric vehicles, it's hard to pick a winner from among the traditional manufacturers. Some are lagging in terms of launches just now, but that doesn't necessarily mean they will end up losing out once demand rises to more meaningful levels. Instead, it makes more sense to look at battery providers they will power the electric-vehicle industry's growth from niche segment to mass market. Among the strongest players is Panasonic (Tokyo: 6752), which began building batteries at Tesla's Gigafactory in Nevada earlier this year.

Teslas are known for their long driving range, and the new batteries, which power the new Model 3, are 30% cheaper than the previous generation, enabling Tesla to keep the price of the car relatively low (around $35,000). Model 3 output is slowly rising, and should eventually reach 400,000 units a year. Panasonic should benefit from this rising production, while avoiding the company-specific risks of Tesla such as high debt levels, its investment in SolarCity and the risk of shareholder dilution.

Looking to the next generation of batteries, the lead technology appears to be solid-state batteries. These have higher energy density (thus more capacity), are more durable, charge faster and are not flammable. GS Yuasa (Tokyo: 6674), the world's fourth-largest battery maker, could be set to win this race. Earlier this month its share price rose by nearly 9% when it announced that, alongside Mitsubishi Corp and Mitsubishi Motors, it had developed a solid-state lithium-ion battery, which would double the range of electric vehicles at no extra cost. Production could start as early as 2020.

The rise of electric vehicles has also sparked interest in the miners of the key minerals that go into these batteries, including lithium and cobalt. The two main listed plays on lithium mining Sociedad Quimica y Minera in Chile and Albemarle in the US between them account for 60% of global lithium carbonate production. Neither is cheap SQM trades on 18 times EV/EBIT and Albemarle is on 20 times. So some investors are looking at smaller speciality miners, such as Galaxy Resources (Sydney: GXY) and Orocobre (Sydney: ORE).

These two stocks have market capitalisations of $500m market and their primary assets are brine lakes in Argentina (Olaroz in Orocobre's case, Sal de Vida in Galaxy's case), which are being developed. Current sales are low ($15m for Orocobre, zero for Galaxy), but the valuation is all in their assets' potential, which in the case of Sal de Vida is thought to be substantial.

Self-driving cars when are they coming and who will benefit?

Self-driving cars are often seen as a technology of the future, but in fact they are already here. Their evolution can be divided into five levels. At level 1, vehicles have only minor support functions, such as cruise control. Level 2 adds support functions such as lane assistance, automated braking, adaptive cruise control, and parking assistance. These features are already common.

By 2021, most big car makers expect to have level 3 models: this is where the control shifts from human to machine, with the car able to make its own decisions. However, level 3 cars can only be used in restricted areas and environments (they are "geo-fenced"), and the driver still sits behind the wheel in case they have to take over (in poor weather, say). At level 4, the car is fully autonomous and requires no input from the driver (or rather passenger), but can still only operate within a specific area.

Finally, at level 5, the human driver is superfluous the car has no steering wheel, and neither geographic nor weather-related restrictions. Level 4 is probably achievable within the next decade, but level 5 is much further away.

In the early stages, commercialisation of self-driving cars will come from the services industry, as part of a drive to cut labour costs think taxis, trucks, farm machinery, even snow ploughs and lawn mowers. This also means that self-driving cars will most likely be electric they are cheaper to run. Transport-services companies could be among the biggest beneficiaries of these cost savings. Parts suppliers are another obvious target for investors, but rather than look at traditional manufacturers of car parts, it might make more sense to look at a tech company expanding into the sector.

For example, Intel (Nasdaq: INTC) recently bought Mobileye, a chip maker that specialises in sensors and the development of software algorithms. Together with Mobileye, Intel is working with BMW and Delphi Automotive on level 4 self-driving technology.

When it came to affordable post-war motoring, Germany had the VW Beetle, France had the Citroen 2CV, and Britain had the Morris Minor – the first of which rolled off the production line on this day in 1948.

The “Moggy” was designed by Alec Issigonis, who would go on to design the Mini, and was an exercise in cramming the most seating space into the smallest-sized body. It had a 918cc engine producing a whopping 27HP, could hit a top speed of 64MPH and had a 0-60 time of over 50 seconds. It was remarkably frugal, however, racking up 40 miles to the gallon – something the public appreciated in the austere post-war years.

The original Minor MM was unveiled to the public to much acclaim at the Earls Court Motor Show on 27 October 1948. It was available as a two-door saloon and a convertible tourer. The four-door arrived two years later, followed by the Traveller, splendidly bedecked in wood; and the van, workhorse of the Post Office, in 1953.

The original MM was produced from 1948 to 1952, in which time just over a quarter of a million were sold – a third of those were the convertible version. That was followed by the Series II model, produced between 1952 and 1956, and the Minor 1000, produced from 1956. The 1000 made use of such advanced technology as modern indicators, doing away with the pop-out semaphore arms of the earlier models.

In February 1961 it became the first British car to sell more than a million, and by the time production of the saloon version ended in 1970, over 1.3 million had been built. Production of the Traveller and vans ended in 1972.

It is still surprisingly popular, however – there are some 15,000 Minors of all stripes on the roads today (compare that with its successor, the abominable Morris Marina: out of the 1.2 million built, fewer than 400 survive).

The Morris Minor is no longer a particularly cheap car to buy, however. If you're looking to buy a decent example now, you'll have to fork out anything around £15,000. With that, you could buy a Dacia Sandero, currently the cheapest new car on sale in Britain.

Who do you trust? And how much? Back in 2006 the answers to these questions were pretty much as you'd expect. According to a series of YouGov surveys, over 90% of people trusted their family doctor to tell the truth; 81% trusted the BBC; and 65% trusted journalists on "upmarket" newspapers.

They didn't much trust their MPs (44%) or trade union leaders (32%). But they really, really didn't trust "people who run large companies" (23%). After the financial crisis, the chief executives were, oddly, the only group that didn't see a decline in perceived trustworthiness holding steady at 23%. I think we can now dismiss that as a blip. It'll be zero in the 2015 survey.

We had a Volkswagen Golf until we had kids. Then we had a Passat we still drive that ten-year-old Passat. But on the school run this week, I treated it with rather more suspicion than affection. Ask me if I trust corporate management this year and the answer will be "rather less than I did last year". There'll be a lot of people feeling the same about their (mostly newer) Passats and wondering how it is that things so often go so very wrong inside the world's biggest listed companies.

The answer, I think, comes down to two things. The first is the blurred lines of ownership of listed companies. Back in the 1930s, people worried that the rise of the small shareholder was creating "ownerless corporations", companies that would end up being run for the ends of their managers rather than those of their shareholders.

Andy Haldane, chief economist at the Bank of England, gave an interesting talk on the subject this year. He noted that the response to these worries has been to legally hardwire shareholder primacy into "companies' statutory purposes": managers are obliged to act in the interests of shareholders. That's nice, but it hasn't worked very well.

Why? The "co-ordination problem" among shareholders remains. Most have only modest stakes in a company, so they have more incentive to sell than to take corporate action when they aren't happy. That's particularly the case now that so few shares in the UK are held by individuals (it was 50% in the 1960s, it is 10% today).

Most of us invest via intermediaries, so we know nothing of the companies in which we invest. And if the technical owners of a company are just thousands of inert fund managers who aren't exercising their rights of ownership over that company, who effectively owns it? Is it the shareholders or the management, who make all the decisions about how the assets are used? And if it is the latter, how can we be surprised when they use those assets to fly their kids in a private jet to the company-owned hunting lodge?

The classic response to this agent/principal problem has been an attempt to align the interests of shareholder and manager by making managers into huge shareholders. In 1994, notes Haldane, US chief-executive compensation was one-third stock and stock options. By 2006, that had risen to 50%. This doesn't work either or help with the private jet problem.

If you use the jet for your kids, 100% of the benefit accrues to you. If you don't, the £100,000 odd boost to profits is shared by everyone. No incentive there. It also opens up the question of which shareholders managers are best serving: is it the long-term holders (the savers of the world), or those who get more shares in their incentive deal if management pushes the share price or some other metric above a random-seeming target on some random short-term date? Quite.

This brings me on to the second reason why good companies turn bad: money. You could argue that VW, having one huge family shareholder, is mostly immune from the agent/principal problem. You can't argue it has been immune from the money problem. Martin Winterkorn, the former chief executive, earned nearly €16m last year. And he is leaving the company with a €28.5m pension. The "align the interests" nonsense of the last few decades has changed the amount of money that top chief executives can earn from "a lot" to "enough to transform the fortunes of a family for generations to come". This matters.

Max Rendall, author of Legalize: The Only Way to Combat Drugs, once explained to me how drug cartels succeed so brilliantly everywhere. They have almost infinite amounts of money and everyone has a price. So all a cartel has to do is to find the price of every customs official and politician they want onside and pay it. Job done.

Chief executives are just as vulnerable to super greed as anyone else. If you were in line for an effective bonus of $20m if you hit a target (say for international sales of diesel cars) might you tell a lie? Push a lousy product? Maybe you would. Maybe I would.

My point here is simple: ownership confusion and the corrupting effects of skewed financial incentives mean that the current model of shareholder rights is close to broken. That isn't new news, but I suspect it will be brought into sharp relief by the VW scandal. There is no shortage of ideas as to how the system can be changed. But it is time to change it.

There is one silver lining here. I have often pointed out here that if governments really wanted cash (to spend or to get other people to spend) they would have to find it on the balance sheets of big companies simply because that's where it is.

The PPI scandal was interesting in this regard, as the huge volume and scale of the compensation payouts from the banking sector to consumers did represent a whopping transfer of cash from banks to ordinary people. This cash was commonly spent on cars registrations went up 30% in April 2013 at the height of the payout period.

This takes us on to the rather marvellous bit of the VW scandal: those affected could soon find themselves with fistful of compensation cash. The payouts are, sadly, unlikely to include the owners of ten-year-old diesel Passat saloons, but they will include a huge number of those who bought cars in the great PPI boom. They might not spend the billions on cars this time round. But they'll spend it on something. Who needs idiot politicians and their helicopter money to boost spending when you have idiot corporates and their fraud to achieve the same thing?