Global car company to watch in 2016

After three months from hell and 10 years in the making, what’s going to be more intriguing than watching Volkswagen trying to pull back from here?

Regardless of how closely you watch Volkswagen perform, you won’t be watching any closer than the European Commission, the US Environmental Protection Agency and the California Air Review Board.

All of these organisations, plus dozens of government transport and environment departments and non-government lobby groups around Europe and the rest of the world, will put every wheel turned by a Volkswagen Group product and every word uttered by a Volkswagen Group executive under unprecedented scrutiny.

In Europe, at least, most governments have an excuse. EU rules say that if the car passes the initial tests for emissions (or safety or anything else) in the home country, then the rest of the member states accept it. But not anymore.

Even as Volkswagen’s most senior two people were announcing the interim report into their internal Dieselgate/CO2 not-cheat/V6 TDI cheat scandals, an Italian transport department spokesman was telling us that it sounded more like a convenient German national political “all clear” over the CO2 under-quoting issue than a genuine engineering one.

Inside the European Union’s big players, Volkswagen has widened rifts between nations that began with the German government’s frequent effective vetoing of tighter emissions and testing regimes (on behalf of its car-makers) at EU level.

So the French and Italian governments will now test Volkswagen Group cars themselves, and there’s no guarantee that they’ll arrive at the same numbers as the German transport department (KBA).

Already, there are interesting signs coming out of Volkswagen, reaffirming stereotypes that German companies don’t do humble very well, and that they take an awful, awful, awful lot of convincing before they accept that a painstakingly researched Plan A isn’t working. Call it Stalingrad Syndrome.

The Monday after the #Dieselgate scandal broke in Europe, Volkswagen launched the Passat in New York. Diesel Passats, too. And while Europe got an all-new Passat last year, the US version launched in the emerging shadow of Dieselgate was effectively a facelift of the far cheaper version Volkswagen sends Stateside.

Then they launched the Golf GTI Clubsport in Europe in October and followed it up with the frivolously irrelevant Beetle Dune at the Los Angeles show in November. Neither car tied in with the mood of the general public (or regulatory authorities) towards Volkswagen.

Something more earnest was needed, rather than that kind of limited-edition frippery. For a second, they provided it by saying the next Phaeton limousine would be all-electric, then weeks later canned it on cost grounds.

Porsche showed how it should have been done, by confirming the Mission E electric car’s production a week after having the Cayenne implicated in the Group’s latest emissions cheat (the V6 TDI scandal) and Audi showed how Volkswagen should have handled it, by holding its hand up to the V6 thing and promising to fix everything as quickly as possible.

Volkswagen’s tin ear to the public mood continued, though, with the cunningly clever wording of its response to the V6 scandal suggesting loudly that it had learnt nothing from the punishment, in both the share market and public opinion, that came after its 18 months of stuffing the EPA around before the four-cylinder Dieselgate scandal blew up.

There are signs from the new bosses that things might change for the better now. Farm boy Matthias Müller started his working life as an apprentice tool maker at Audi, impressed until Audi put him through university (as a computer scientist) and overtook all the bright young things at Audi, Volkswagen and Porsche until he was in charge of all of them, along with Bentley, Bugatti, Ducati, Lamborghini, Seat, Skoda and a couple of truck ensembles. “Driven” doesn’t begin to describe him. And he’s going after anybody involved in the emissions scandal.

The addition of Herbert Diess from BMW, just as the scandal broke, to head the Volkswagen brand could be critical. Volkswagen returns about two cents in the dollar (Toyota is closer to 10), mainly because the engineering runs so deep that they cost too much to make. Diess made his name pulling cost out of BMWs and hoping people wouldn’t notice (they do) as the profits rose.

The first all-new car they’ll be launching post-Dieselgate looks like being an all-electric retro revisit of the Kombi and it will probably show up at the Consumer Electronics Show in Las Vegas in a few weeks. That’s more like it.

There’s also a new Tiguan afoot, and it will have a plug-in hybrid option on top of its diesel and petrol engines. That’s going to be core-critical.

What intuitively needs to happen is for Volkswagen to abandon diesel in the US, at least, and replace it with plug-in hybrids, but (as in Australia) low fuel costs put that in the “bad idea” file.

The Group had based its medium-tern planning around having enough time to trickle the plug-in and electrified technologies down through Porsche and Audi so they were more cost effective when they got to the front lines at the Volkswagen brand. (Yeah, they already have plug-in hybrid Golfs and Passats, but they’re more peripheral than volume.)

It might be that they don’t have that time anymore and that’s where they’ll have to push, but that’ll run at odds with their commitment to bring up the Volkswagen brand’s share of the Group profit.

But that’s not the end of it. Next year will see what Volkswagen’s fix is for the Australian Dieselgate cars. It will see how Müller’s compensation package for affected residuals translates into Australian dollars. It will see what Volkswagen does to shore up new car sales that fell, year on year, 25 per cent globally in a rising November market.

It could be that there are bargains to be had, with Volkswagen also having to figure out a way to reinvent or rebrand the diesel engines that are at the core of its brand(s). And that’s hard, long and expensive, to do.

That’s without reckoning on how much fun there’ll be for spectators to see how much the EPA ends up fining the company (and it could run into billions, by law).

Don’t expect it to go easy, because senior officials from both the EPA and CARB have been on the receiving end of ferocious sprays from senior Volkswagen executives, with CARB’s Mary Nichols admitting she copped one such verbal from suspended Volkswagen Group powertrain boss, Wolfgang Hatz, that left him red faced, veins bulging and with spittle bursting from his mouth and her trembling with both rage and fear.

And, ironically, it was because CARB didn’t want to give Volkswagen “clean diesel” buyers a cash-back green rebate.

Then there will be the first settlements of some of the scores of class-action lawsuits it’s facing around the world.

Nope, no other car-maker in the world will come within cooee of being as interesting to watch as Volkswagen next year. And, even then, the next most interesting brand is probably Audi. For similar reasons.