Widening emissions cheating scandals, denials, probes and some settlements with fines; it does seem like an open season for global automakers.
Just as the pressure weighing on the industry for more than a year finally appeared to ease last week with Volkswagen agreeing to pay $4.3bn in fines to total as much as $23bn for admittedly cheating on emissions tests, Renault and Fiat Chrysler were hit with similar allegations of violating pollution regulations.
Paris prosecutors, who raided Renault a year ago for emissions investigation, opened a probe into the automaker on Thursday. Just about the same time, the US Environmental Protection Agency accused Fiat Chrysler of installing software in Jeep Grand Cherokees and Ram 1500 pickups that allowed them to exceed pollution limits on the road. The Justice Department also is investigating Fiat Chrysler over its diesel emissions, Bloomberg reported on Friday.
Both companies have denied wrongdoing.
It might seem like the entire automotive industry is under the scanner for quite some time. Audi – a VW unit – is accused of rigging gasoline-fuelled cars, Mitsubishi Motors has admitted to doctoring fuel-economy claims, Takata has agreed to pay $1bn to settle an investigation over more than 100mn faulty air bags linked to 17 deaths worldwide; and General Motors’ ignition-switch failure was blamed for the loss of at least 120 lives, leading to $2.1bn in fines and legal settlements with more potentially coming.
Investigators in recent years have also focused on Toyota’s faulty accelerator pedals, Honda’s under-reporting of fatal accidents and injuries, incomplete safety recalls by Fiat Chrysler and overstated fuel economy by Ford, Hyundai Motor and Kia Motors.
Emissions cheating, which envisages cars polluting more on the road than during tests to rev up performance, dates back to at least the 1970s, when carmakers were rolling out models that turned off anti-pollution systems when the air conditioning was on, according to a Bloomberg report. Others had sensors to activate pollution controls only at testing temperatures. In 1973, US regulators accused VW of cheating, leading to a $120,000 settlement. GM paid $45mn in 1995 after being accused of circumventing pollution controls.
Automakers do admit discrepancies in their emissions readings, but they point to fuzzy regulations that allow carmakers to adjust exhaust systems to protect the engine. That doesn’t mean the manufacturers are cheats, according to Fiat CEO Sergio Marchionne.
In a regime of tighter emissions standards, carmakers are now putting more resources into expensive electric vehicles innovation to make cleaner new models and win back customer confidence. Consumers, however, not only face a question of when to trust these automotive brands, but whether to trust new technologies too.
True, every automaker is keen to ensure top-line growth and bottom-line gain by staying above cut-throat competition. But the industry be better prepared as it cruises towards a terrain of lower emissions and higher scrutiny. Carmakers, then, would do better by not letting the current crisis go to waste, making radical changes to their work culture.
