VW has been having quite a bit of trouble in the past few months and the news doesn't seem to be getting better for the German car manufacturer.
VW was issued another violation on Nov. 2, and the violation cited problems with "defeat device" software in VW, Porsche and Audi models, reported Consumer Affairs. The same software was found in car models involved in the emissions scandal.
This time, VW is denying the charges, pointing to the U.S. and claiming the accusations stem from a distaste towards genuine market competition, explained the source. Porsche, a car brand owned by Volkswagen Group, claims to be blindsided by the findings of the U.S. Environmental Protection Agency.
"It makes any past claims of 'a limited number of people' involved in the deception appear even more outrageous," Senior Analyst for Kelley Blue Book Karl Brauer noted, according to Consumer Affairs. "Volkswagen would do well to immediately and completely disclose all people and products involved in this deception, no matter how far-reaching. Repairing the automaker's brand and regaining trust should be VW Group's highest priority at this point, but it can't begin until full and voluntary disclosure is achieved."
More problems, more vehicles recalled
This second notice tacked on 10,000 vehicles to the list of emission-cheating cars in question, including the 2015 Porsche Cayenne and the 2016 Audi A6 Quattro, reported CNBC. Before these latest additions, VW had announced that 11 million cars globally were affected by the altered devices.
EPA officials are angered with the failure to comply with laws under the Clean Air Act.
"All companies should be playing by the same rules. EPA, with our state, and federal partners, will continue to investigate these serious matters, to secure the benefits of the Clean Air Act ... and to ensure consumers get the environmental performance they expect," commented Assistant Administrator for the Office for EPA's Enforcement and Compliance Assurance Cynthia Giles, CNBC reported.
These 11 million cars add on to the announcement of a mass recall for luxury Porsche cars at the end of October, according to Reuters. Volkswagen group reported that the recall was precautionary but the recall involved engine compartments containing potential leaks affecting the vehicles' low-pressure fuel lines, explained the source.
A separate internal investigation within VW found that 800,000 vehicles had unexplained inconsistencies in their CO2 emissions, according to a separate report from CNBC.
VW estimates that this issue could cost the company somewhere around $2.2 billion. The company failed to indicate which vehicles were affected by these CO2 issues, but assured that the problems had nothing to do with overall safety, noted the source.
Sales and supply chain effect
While Volkswagen's U.S. car sales are up .24 percent this month compared to last year, the increase pales in comparison to other industry leaders, according to BBC.
Car companies in the U.S. are reporting double digit spikes in sales throughout October. General Motors, an industry leader, saw a 16 percent uptick in sales, whereas Ford saw a 13 percent rise.
These numbers are monstrous compared to VW and industry experts are blaming the scandal's effect on consumer trust for the dip, reported the source.
"It's the intentional deceit that bothers consumers and Volkswagen hasn't laid out its plan for how it is going to fix this. They need to lay out a plan before they can begin to turn the corner," said Senior Analyst for AutoTrader.com Michelle Krebs, noted BBC.
Other car companies' sales were boosted due to a combination of low fuel pricing and bottomed-out borrowing rates. The duo makes it a great time for consumers to purchase cars.
VW was missing the market in the U.S. before the emissions scandal hit the headlines, however, explained BBC. While U.S. consumers are looking to purchase larger cars, VW has not tapped that market.
These latest scandals for VW will mean some major cost reduction methods for the company in upcoming months. According to Spend Matters, the effects will be felt across every level of the supply chain, from major supplier firms to consumers.
Suppliers who have diversified their manufacturers via strategic sourcing may fare better than any suppliers dependent on VW products for business, explained the source.
Whichever way you slice it, VW is in a big mess and it doesn't seem like the problems will be ending for the company any time soon.