VW brand chief said diesels will stay in U.S. lineup

By Ryan Beene, Crain News Service

LAS VEGAS (Jan. 7, 2016) — Volkswagen A.G.'s brand chief isn't giving up on diesels in the U.S. market.

That's despite the company's emissions scandal that has undermined the eco-friendly credentials of the niche powertrain.

Herbert Diess said that diesels will continue to have a role in Volkswagen's U.S. lineup because, with the latest emissions technologies, diesels can be clean. He also touted the long range and high torque of diesel engines.

“I wouldn't give up diesel, even in the U.S.,” Mr. Diess told reporters on the sidelines of VW's Consumer Electronics Show (CES) keynote address in Las Vegas the evening of Jan. 5.

VW is scrambling to receive U.S. regulatory approval for fixes to nearly 500,000 diesels fitted with illegal emissions software designed to manipulate nitrogen oxide emissions measurements on government tests.

The car maker submitted a draft plan to fix the noncompliant diesels to the California Air Resources Board (CARB) and the U.S. Environmental Protection Agency (EPA) in November and has been in talks with the regulators since.

Those talks “have not produced an acceptable way forward,” Cynthia Giles, assistant administrator for the EPA's Office of Enforcement, said in a statement Jan. 4 announcing the U.S. government's civil suit against VW for the emissions violations.

Volkswagen A.G. CEO Matthius Mueller plans to meet with the EPA in Washington, D.C., next week to discuss the matter, Reuters reported Jan. 4.

In his keynote remarks, Mr. Diess called the ongoing talks with regulators “constructive” and said the company has made “significant progress” in recent weeks. He said he was “optimistic” that the VW would receive regulatory approval for the fix plans “within the coming weeks and months.”

Mr. Diess told reporters that Volkswagen's newest diesels can be fixed with software alone. He said the fixes for older cars were more complicated and would require “intrusion into the car will be quite significant. That's what we are discussing with the authorities.”

Buybacks?

Some U.S. regulators and lawmakers have said VW may have to buy back older models. Mr. Diess didn't say whether VW is discussing that option.

Volkswagen has admitted it installed software in certain diesel models sold in the U.S. that allowed the cars to pass government emissions tests, but then emit nearly 40 times the allowed levels of pollutants on the road.

The U.S. Justice Department on Jan. 4 sued Volkswagen for up to $48 billion for allegedly violating U.S. environmental laws.

Mr. Diess said Volkswagen expects the company will be able to repair by the end of 2016 about 8.5 million diesel cars sold in Europe that don't comply with emissions standards.

Separately, he announced a new partnership with Mobileye, the Israeli machine vision company that is a leader in camera technology used in advanced safety features such as automatic braking or lane departure warning.

Mobileye deal

VW and Mobileye signed on Jan. 5 an agreement under which Mobileye's camera systems will beef up the mapping systems VW cars will use to enable autonomous driving, Mr. Diess said.

“We always have to look at partnerships,” Mr. Diess said. “This world is changing so much faster than our traditional world” of automotive suppliers.

Reuters contributed to this report, which appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.