Welcome back, dieselgate – the week | Automotive Industry Comment

Alleged manipulation of diesel vehicles’ emission testing was back in UK news this week

Dieselgate has reared its ugly ahead again, this time in the UK, getting on for five years after Volkswagen admitted cheating on US emissions testing, sparking a saga that has cost it billions in fines and other costs, such as setting up the nationwide EV recharging network Electrify America, led to tens of thousands of perfectly functional cars being parked in the desert, put executives in US jails as German prosecutors tried to achieve likewise (with less success) this side of the Atlantic and generally tarnished its reputation. But this week’s news was not about VW.

Instead it’s Daimler’s Mercedes-Benz which, allegedly, installed software to cheat diesel engine emissions testing by detecting when a vehicle was being driven on a test cycle and altering engine control settings to achieve a pass. This time it’s UK media and lawyers with the automaker in their cross-hairs. Reports this week said Mercedes could be forced to recall up to 500,000 vehicles in the UK over claims of a new dieselgate emissions scandal. Meanwhile, over 10,000 British owners have signed up to join a possible legal case against the automaker amid fears that they were misled into buying polluting cars. Claims lawyers are telling would-be litigants “the German Federal Motor Transport Authority (KBA) found that Mercedes installed a cheating software in their diesel engines that limited emissions readings during vehicle emissions testing and therefore misrepresenting the actual emissions during real-world driving. The nitrogen oxide (NOx) emissions of the engines as a result didn’t comply with EU regulatory requirements”. Daimler had been fined the equivalent of GBP776m by German prosecutors and the KBA had ordered Mercedes to recall around 90,000 vehicles in England and Wales. One law firm estimated 160,000 vehicles had been affected by recall notices in the UK so far but predicted it could reach half a million based on historic sales figures of cars with the affected engine types. In all, around one million British Mercedes drivers, including previous owners, could be eligible for compensation payouts worth up to GBP20,000 each. Mercedes-Benz Cars UK said: “We believe these claims are without merit, and will vigorously defend against any group action.”

How this will go is anyone’s guess but VW experience here does not bode well for Mercedes. Lawyers inviting owners to join the Mercedes group action said they were also acting for around 70,000 owners in the ‘Volkswagen Emissions Group’ whose claim is thought to be the largest group action in British legal history in terms of numbers of claimants and “worth hundreds of millions of pounds in compensation”. “We’ve recently achieved a major victory for the claimants by proving that VW fitted 1.2m vehicles with ‘defeat devices’,” one firm claims, citing a favourable High Court ruling handed down in the UK last April. A judge found VW subverted key air pollution tests by using special software to reduce emissions of nitrogen oxides under test conditions.

Dieselgate ain’t done with yet.

COVID-19 is still very much in the news and this week we learned Hyundai had suspended production of its Palisade flagship SUV and Genesis GV80 luxury SUV due to parts supply shortages. That followed the temporary suspension of two assembly lines at its Ulsan 2 plants and one line at Ulsan 4 in the south of the country last week after a worker at a parts suppliers died the previous day – understood to be due the COVID-19 disease. Hyundai Motor Group affiliate Kia Motors had also halted two domestic plants last week after two workers at the plants near Seoul were confirmed to have contracted the coronavirus. Hyundai has not had too much luck with the recently launched, luxury brand GV80. Earlier this month it had to suspend deliveries of diesel versions due to excessive engine vibrations.

Our new and future models guru has been busy as usual this week and it looks like there are some interesting new PSA group models on the way worldwide. PSA has for decades tended to put Peugeot first and there is ample evidence for that continuing. Citroen and, more recently, DS plus Opel-Vauxhall, all need to be funded with fresh models and technology with none of them allowed to challenge prescient Peugeot. As of now, the lion emblem marque has a head start on other group divisions. Will that continue should the merger with FCA go ahead though? Coming from a land where the Ford Ranger and Toyota Hilux duke it out to be top selling vehicle model, not just top truck, I was intrigued to see a made-in-China (with local partner Changan) Peugeot pickup truck planned for the Americas, and possibly North America as well. This as Mercedes axes the Nissan Barcelona built rebadged Navara X-class, and the plant is scheduled to close, and VW plans to replace its in-house designed and built Amarok with a new generation developed with new LCV/EV JV partner Ford, maker of that top selling Ranger.

Citroen was next to get the once-over. “PSA sees Citroën as a mere brand and one which must not challenge Peugeot. The lion logo marque is in turn supposed to be near-luxury in the style of how Volkswagen is perceived in most parts of the world. The double chevron symbol make is also sub-DS, a name still battling to gain any traction outside France six years since it was invented.”

Finally, the former, once mighty (mostly in their domestic markets) Opel and Vauxhall. “With both brands stuck in a terrible slide after the loss of multiple GM architecture models such as the Mokka X, Karl/Viva, Adam and Zafira, COVID-19 couldn’t have happened at a worse time for Opel and Vauxhall. May was another awful month, ACEA noting that Opel-Vauxhall’s European sales plummeted by a combined 66%. Might the many new vehicles arriving relatively soon turn things around?”

GM’s long-lived Oshawa plant in Canada is gone and now it looks like another Ontario car factory is at risk. Ford reportedly is ending Edge SUV production, a move seen as leading to closure of the plant which makes it. US media reports, citing a report by AutoForecast Solutions of the axing of the Edge model line, noted the Ontario plant currently makes only the Lincoln Nautilus and Edge with Nautilus production scheduled to move to China after 2023. AutoForecast Solutions previously correctly forecast GM would end production at Oshawa. The current Edge is also built in China. Edge was Ford’s final Canadian-built vehicle and its cancellation puts Oakville at risk of closing. The Canadian auto workers’ union Unifor’s labour contract covering the Oakville plant, as well as two engine plants in Windsor, Ontario, expires in September.

Finally, a reminder our daily automotive coronavirus briefing continues to be updated and is free to read so do forward it to colleagues.

Have a nice weekend.

Graeme Roberts, Deputy Editor, just-auto.com

*** This article has been archived for your research. The original version from just-auto.com can be found here ***