Volkswagen’s Worldwide Sales Up, But Criminal Charges Could Loom

Volkswagen-TDI

It’s been almost one year since news broke of Volkswagen’s diesel emissions scandal. At the time, we wondered how deep this scandal would go and if VW’s TDI plans were irreparable.

So far, Volkswagen has shown no interest in bringing its TDI line back to the U.S., but seems to have been doing just fine without it. Last month CNN said,

Global sales of Volkswagen cars and trucks have eked out about a 1% gain in the first five months of the year, despite the scandal. May sales gains were even stronger, a sign that the automaker is starting to put the diesel scandal behind it. Its U.S. sales have been down 7% in the first half of the year, although the United States accounts for only about 5% of its global sales.

Volkswagen’s outlook isn’t all rosy, though. This week investigators with the U.S. Department of Justice have found evidence of criminal wrongdoing in the case.

U.S. prosecutors are now in discussions with VW’s lawyers, which could lead to more fines and even a criminal trial.

Car and Driver said,

Any settlement on the criminal side of the case likely would top the $1.2 billion levied against Toyota for its unintended-acceleration issues. It also could involve extradition of individuals, as many of those who worked on the emissions hardware and the software strategy live in Germany.

It’s the extradition part that is such big news. Most of the automotive world has expected VW to skate by this scandal by paying tens of billions of dollars in fines and penalties, then eventually moving on without any further consequences. Extraditing people involved in the scandal from Germany to the U.S. to face trial could be an unprecedented consequence of automotive deception.

Volkswagen initially maintained that lower-level “rogue” employees were responsible for the defeat software, but there is evidence that top executives, including then-CEO Martin Winterkorn, knew about the illegal activity more than a year before it became public. Plus, Winterkorn is being investigated in Germany “on suspicions of market manipulation and the timing in which investors could have been informed of the issue.”

We don’t know who is being investigated or what charges those people might face. It’s becoming increasingly clear, however, that Volkswagen willfully circumvented the law, which could bring consequences much more severe than the already staggering fines.

It’s a good thing global sales are doing so well, because Volkswagen is going to need the money.

Does the possibility of criminal charges against Volkswagen change your opinion about the brand?

-tgriffith

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