Keith Wheeler | Opinion, October 5, 2015

Volkswagen has had $11.6 billion in sales over eight years in Australia, but the SMH article inferred that Volkswagen was laundering profits via the Grand Duchy of Luxembourg and The Netherlands. VW isn’t the only company suspected of not paying a fair share of tax in Australia, but cheating on exhaust emissions to gain sales will shine the spotlight on the possibility of cheating on tax returns, too.

I feel for owners of current VW vehicles. The SMH story referred to “readers who have had the misfortune to have their car serviced at an authorised dealership.” The fact that VW’s revenue from “parts and accessories” during those eight years doubled from $59 million to $120 million perhaps tells a story of its own.

At the moment the exhaust scandal applies to overseas VW models. The SMH “Drive” section reported that the non-government International Council on Clean Transportation tested real-world diesel emissions on BMWs and Volkswagens in 2014. While the BMWs passed, the VWs failed dramatically. As well as Volkswagens, some Audis and Skodas could be affected, too. 

The Daily Mail’s website informed Britons, “Volkswagen admitted earlier this week that millions of its diesel cars had been fitted with a ‘defeat device’. The device switched engines to a cleaner mode during official tests, but once on the road, the cars produced nitrogen oxide pollutants at up to 40 times the legal standard”.

With an estimated 11 million cars worldwide affected, (42,918 in Australia), the Volkswagen company has set aside an $18 billion fund for compensation cases. On the Stock Exchange, the scandal wiped $28 billion off Volkswagen’s stock value overnight. The company employs 270,000 workers in Germany, and there is speculation that a company crash could pose a greater risk to Europe than the Greek crisis. While the whole affair is unlikely to come to this, other VW-owned brands, and German made cars in particular, are almost certain to lose sales.

London Lord Mayor Boris Johnson wants diesels out of London, advocating paying diesel owners £2000 “scrappage”. “Millions were unfairly seduced into buying diesel thinking it is greener,” he said. Diesel fumes contain more than 40 toxic pollutants which can cause cancer. High levels of particulates get deep into the lungs and bloodstream, triggering asthma, inflammation, heart attacks and strokes.

In inner Sydney, a VW has been seen as a very trendy “green” car to own. How trendy will VWs be now that “green” buyers have been left red-faced?

Meanwhile, USA Today reports that a Seattle-based law firm, Hagens Berman, has been the first of many to launch class-action lawsuits. "Not only did they pay more for something they never received, but they've been victim to a tremendous act of deception,” the lawsuit claimed.

Slater and Gordon is setting up a register for worried VW owners. Issues could include decreased resale value.

Tougher emissions testing could signal the end for diesel cars. I’m glad my new car came with a traditional Australian petrol engine. Diesels are for towing, and for trucks.