Volkswagen AG is the largest European carmaker and the biggest by sales in the world after the first six months of the year, and its admission on cheating on diesel emissions tests could have bigger long-term consequences on its continental rivals.

Just a little over two weeks ago German automaker VW AG admitted it had rigged diesel emissions tests in the US and later on said it had installed the cheating software on 11 million autos in the world, with German authorities also claiming foul play on the European continent. The European automotive industry is highly dependant on diesel and the scandal has drawn increased scrutiny and oversight from regulators not only in Europe but around the world on the technology. Thus, automakers such as Renault, PSA Peugeot Citroen or Fiat Chrysler might have larger long-term strategy issues than even the company that delivered the crisis. Naturally, tensions might be in the rise behind their positive and united façade they have been displaying in front of regulators around the world.

VW’s rigging of emissions tests in the US has attracted intense scrutiny of the wider practices that manipulate tests by exploiting loopholes in the aging test procedures, which, although legal have been one of the reasons why in real world driving nitrogen oxide (NOx) emissions can be up to seven times higher than their European limits. “This VW tidal wave will accelerate the shift,” away from diesel to other fueling technologies, such as hybrids. “Some carmakers aren’t ready for this,” explains a senior executive at a French supplier of diesel emissions technology.

Via Reuters


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