VW diesel emissions scandal: what you need to know in 10 questions (updated) Page 4

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2009 Volkswagen Jetta TDI

2009 Volkswagen Jetta TDI

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(8) What's been the impact on the company?

Severe, and continuing.

When the European financial markets opened on September 21, VW Group shares lost more than 20 percent of their value. That's the best indication of how bad the damage from this could get.

The Los Angeles Times published a scathing editorial on Sunday, September 20, and more followed.

The timing is awkward: Some commentators have expressed dissatisfaction that the GM ignition-switch scandal, which killed more than 100 people, was recently resolved with a fine lower than Toyota's and no individuals held criminally culpable.

Volkswagen's CEO issued a rare weekend statement--very unlikely for a German company--that was as contrite as we've seen in years. That didn't prevent him from resigning just days later; he has not so far been charged with any wrongdoing.

Over the longer term, this event could set back VW's aspirations in North America by a decade or more, just as the so-called "sudden acceleration" fiasco did for Audi in the mid-1980s.

Volkswagen has struggled for years to understand the U.S. market and launch appropriate models.

More than two decades after the SUV boom began, it remains largely car-based and its Tiguan compact crossover--the hottest market segment today--is old, too small, and expensive. A mid-sized SUV concept, the CrossBlue, remains in the future more than three years after it was first shown.

And diesels were one of VW's few distinguishing points. They made up 22 percent of its 2014 sales, and 23 percent of its August 2015 sales.

The restrictions on all diesel vehicle sales by VW, Audi, and Porsche (see below) have hurt Volkswagen's U.S. sales totals in a growing market. Some customers for non-diesel vehicles have likely turned away owing to the perception of corporate malfeasance.

In short, VW is facing severe and painful challenges in the U.S. market for many years to come, not to mention a recall for half a million cars that could prove breathtakingly expensive if a suitable fix can't be accomplished in software.

Multiple class-action suits have already been filed, and were consolidated not in Detroit—where VW preferred them to be heard—but in the considerably tougher California district.

Total potential fines could reach $40 billion or more, including a U.S. maximum of $37,500 for each non-compliant car sold. VW Group's entire 2014 global profit was only $14.25 billion.

(9) Can you still buy a new Volkswagen or Audi with a diesel engine?

No. Over the weekend, VW issued a "stop-sale order" on all remaining new 2014 and 2015 TDI models with 2.0-liter diesels on its dealer's lots; Audi followed suit as well.

Similar orders followed a few weeks later for VW, Audi, and Porsche vehicles fitted with the larger 3.0-liter V-6 diesel engine.

The brands also told their dealers not to sell any of the affected vehicles as Certified Used cars, though they cannot regulate the sale of non-certified used models.

It is still possible to find (heavily discounted) used diesel vehicles from the three makers, both at dealers and third-party sellers.

All of those vehicles remain in limbo until the details of a recall are announced and approved.

(10) What does this all mean--for owners, for Volkswagen, and for diesel cars in North America?

In our view, this will not end well.

The deliberate attempt by VW to deceive regulators, flout emissions rules, and sell cars it knew to be illegal will hurt TDI owners, the company itself, and very likely the prospects for diesel passenger vehicles in the U.S. market.

Unlike the GM ignition-switch case and the Toyota acceleration case, this involves a company that set out deliberately to circumvent regulations and did so successfully for eight years.

And it's not as if the cars were slightly out of compliance: At one point, one model emitted 35 times the permissible limit of highly-harmful nitrous oxides (NOx).

We suspect the EPA will want to put Volkswagen's rotting head on a pike on the walls of the town, to discourage the blatant, flagrant arrogance that the company appears to have displayed.

Over the intervening months, no fewer than four friends of this site have contacted us for advice about car-buying.

One intended to buy a 2016 Jetta TDI, and now won't; another plans to dispose of his 2014 Jetta TDI SportWagen and will no longer buy VW products. All of them remain in limbo.

We think this story has only started.

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