As the story of Volkswagen’s emission defeat devices continues to unfold, details on how the diesel engines were rigged and which cars are affected are slowly coming to light.
But executives within the carmaker – along with others involved with the investigation – have said very little on what motivated Volkswagen Group to install these cheats on more than 11 million cars worldwide. Like many scandals that have come before, the trigger of Volkswagen’s scandal appears to be rooted in money.
Over the last decade, Volkswagen had been struggling to gain a solid footing in the U.S. diesel market. The perception that diesel emitted more pollution than gasoline engines, tumultuous diesel fuel prices and the cost of diesel technology proved challenging to overcome.
To help boost sales, Volkswagen began a marketing campgain labeling its powertrain as “clean diesel.” The ads seemed effective.
“In 2012, Volkswagen’s U.S. sales volume rose to the highest level since 1973,” noted Timothy Cain, an analyst that tracks vehicle sales for GoodCarBadCar.net.
Sales numbers refused to solidify for the company, as Business Insider noted just two years later:
“Volkswagen recently announced that its U.S. auto sales dropped by a staggering 22 percent in June,” Business Insider reported in June 2014. “This will mark the fourth time in the last six months that the brand has experienced a double-digit fall in sales.”
Volkswagen’s share of the U.S. diesel market was gaining ground, though. Last year, Car and Driver noted that 75 percent of all diesel cars sold in 2013 were Volkswagens.
But at the same time that Volkswagen was working to maintain its market share, the cost of efficient diesel engines was chipping away at its profits.
“The problem for VW was that cutting NOx [nitrogen oxides] is expensive,” said Automotive News‘ Nick Gibbs. “Analysts from Exane BNP Paribas estimate that reduction technologies have risen from around 700 euros ($790) per vehicle to meet Europe’s Euro5 emissions targets to 1,300 euros for Euro6, which has just come into force this month.”
When comparing markets, Alberto Pisoni, a director with Genera Motors Powertrain in Europe, said lower unit sales and more stringent emissions regulations make the U.S. the “most challenging” diesel market.
“When you have a larger scale for your product then for sure there is a benefit,” commented Pisoni.
For other auto manufacturers trying to blend low-emission technology in an appealing, competitive vehicle, the reality of Volkswagen’s pressure to use a defeat device could become a warning against using diesel. Gibbs explains why:
“The knowledge that arguably the world’s technology leader in diesels can’t make the U.S market work without cheating could now repel other makers.”