drive

Amid scandal, VW keeps low profile at US auto show

November 20, 2015

The 2016 Volkswagen Beetle Dune is seen at the 2015 Los Angeles Auto Show. Volkswagen is reeling from revelations by US regulators that the company had installed software in its diesel cars that helped them evade emissions standards. – AFP/Relaxnews, November 20, 2015.German car giant Volkswagen, tainted by an emissions scandal, is keeping a low profile as it attends a major auto show in the United States and prepares to meet with regulators.

Gone were the company's flashy presentations and pompous speeches at the Los Angeles Auto Show Wednesday when Volkswagen's chief executive in the US, Michael Horn, made an appearance.

Thronged by reporters, Horn wouldn't discuss details of dealings with federal regulators VW executives are to meet with on Friday. But he went out of his way to express regret over the scandal that has dealt a heavy blow to the automaker.

"There's frustrations and there's sometimes anger but also a lot of support," Horn told reporters in his first public comments on the emissions scandal since he appeared before the US Congress in October.

"These reactions are fully understandable since at VW North America we have the same feelings."

Volkswagen is reeling from revelations by US regulators in September that the company had installed software in its diesel cars in the United States that helped them evade emissions standards.

The company later admitted that some 11 million diesel vehicles worldwide have been fitted with such software.

The so-called defeat devices turn on pollution controls when the car is undergoing testing, and off when it is back on the road, allowing it to spew out harmful levels of nitrogen oxide.

Horn said that while the company has expressed regret over its actions and "can't stop apologising", it was fully aware that "apologies are not enough".

He said that 120,000 diesel car owners in the US have so far signed up for a goodwill compensation package, which includes a US$500 prepaid Visa card.

Other perks of the deal are a US$500 voucher for VW dealership services and free roadside assistance for three years.

At the same time, the automaker is going all out to try to restore its tattered strategy in the US, where it had hoped, before the scandal, to overtake Toyota and General Motors in auto sales.

"It was very important they show regret about what happened as well as a clear plan going forward," said Karl Brauer, an analyst at Kelley Blue Book, a valuation and automotive research company.

Americans are especially sensitive to cheating scandals and VW's mea culpa is seen as a necessary step as it tries to restore its image.

Winning back confidence is also key in California, the top auto market in the United States and the most difficult to conquer because of strict pollution controls.

In a sign of Volkswagen's low-key approach, not a single diesel car was among the new VW models on display at the Los Angeles Auto Show this week.

Apart from federal regulators, VW executives were also expected to meet Friday with members of California's Air Resources Board to discuss plans to recall and repair VW and Audi vehicles affected by the emissions scandal.

"The board is very important because they can control sales and impose fines," Brauer said.

He said it was still unclear what the long-term impact of the scandal will be and whether Volkswagen will be able to fully recover.

"They still have a dedicated fan base, many of them diesel owners and... the majority seems to be remaining loyal to the company," Brauer said.

Nonetheless, he added, the company faces an uphill struggle to regain trust.

"There will be slower growth and higher challenges." – AFP/Relaxnews, November 20, 2015.