Volkswagen and Audi NZ chiefs say issue is 'trust' not technical

The worldwide head of Volkswagen resigned last night in the wake of the diesel "cheat" software controversy, while the company's New Zealand chiefs cannot rule out vehicles here being involved.

However they said the issue was one of trust, not a technical issue.

At an impromptu press conference arranged yesterday around the local launch of the new Audi RS3, Volkswagen and Audi distributor European Motor Distributors group general manager, Glynn Tulloch, Volkswagen general manager Tom Ruddenklau and Audi general manager Dean Sheed discussed the local implications of the scandal.

Concerned at the confusion surrounding the reporting of the scandal, Tulloch, Ruddenklau and Sheed took advantage of the small performance Audi’s launch to front up to the local motoring media. 

“Yesterday it looked like New Zealand, as a market, was not involved,” said Ruddenklau. 

“Overnight more details have emerged and it seems to be a lot broader than just in the US. We still can’t confirm what it means for New Zealand or what models are involved. What we are doing is still gathering information. 

“Our most important job is to communicate with our customers. The most important thing is our brand and the trust of our customers.” 

During the weekend it was revealed that the software the German manufacturer had installed on some of its turbo diesel (TDI) vehicles to cheat US Environmental Protection Agency (EPA) emission tests may have been used on more cars worldwide than first thought, although just how widespread the usage was has yet to be accurately established. 

 New Zealand has no local emission standards or testing, rather relying on international standards, so even if local vehicles do contain the software it will not affect them in any way. 

 “This is not a technical issue,” said Ruddenklau, “it is a trust issue.” 

 It is still not even clear if the issue will affect other brands owned by the Volkswagen Group, including Audi and Skoda - both of which use versions of the 2.0-litre TDI engine involved in the scandal - but Tulloch was quick to point out that it wasn’t in any way a safety issue. 

 “There’s no safety issue, there’s no technical issue, at the end of the day it is a customer trust issue,” said Tulloch. 

 “We don’t know if our cars are even affected or not - that’s what we are waiting on now.” 

Ruddenklau said that the company had been in contact with the Automobile Association and the Motor Trade Association over the issue, as well as dealing personally with concerned customers and Volkswagen dealers. 

 “We have to deal with this by being open and honest and letting our customers know exactly what is going on - even if that is to tell them that we have nothing to tell them yet!” 

 “If we fix the emissions, but we don’t fix the trust, then it’s a fail. It’s going to be our single biggest challenge to repair that trust,” he said. 

Meanwhile the controversy has claimed its first victim - Volkswagen CEO Martin Winterkorn stepped down last night, days after admitting that the world's top-selling carmaker had rigged diesel emissions to pass U.S. tests during his tenure.

Former  Volkswagen CEO Martin Winterkorn, who resigned last night. Picture/AP.

In a statement, Winterkorn  took responsibility for the "irregularities" found in diesel engines but said he was "not aware of any wrongdoing on my part."

"Volkswagen needs a fresh start - also in terms of personnel," he said. "I am clearing the way for this fresh start with my resignation."

Winterkorn's statement followed a crisis meeting of the Volkswagen supervisory board's executive committee. Its acting chairman, Berthold Huber, told reporters moments later that company directors are "resolved to embark with determination on a credible new beginning."

There was no immediate decision on a new CEO. Huber said that will be discussed only at a board meeting on Friday.

Winterkorn said VW must continue providing "clarification and transparency."

"This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis," he added.

VW shares were up 8.7 percent at 121 euros following his resignation.

The share price still has a long way to go to recoup the nearly 25 billion euros (around $28 billion) wiped off its market value in the first two days of trading after the U.S. Environmental Protection Agency announced that VW is violating the Clean Air Act.

Winterkorn, VW's boss since 2007, had come under intense pressure since the disclosure that stealth software makes VW's 2009-2015 model cars powered by 2.0-liter diesel engines run cleaner during emissions tests than in actual driving.

The EPA accused VW of installing the "defeat device" in 482,000 cars sold in the U.S. VW then acknowledged that similar software exists in 11 million diesel cars worldwide.

Huber said that "Mr. Winterkorn had no knowledge of the manipulation of emission values" and praised the departing CEO's "readiness to take responsibility in this difficult situation for Volkswagen."

Before the scandal broke, Winterkorn, 68, had been expecting to get a two-year contract extension, through 2018, at Friday's board meeting.

His resignation came only a day after he issued a video message asking staff and the public "for your trust on our way forward."

The EPA said Volkswagen AG could face fines of as much as $18 billion. Other governments from Europe to South Korea have begun their own investigations, and law firms have already filed class-action suits on behalf of customers.

 VW directors renewed pledges of a thorough investigation after Winterkorn's resignation.

"We will clear up these events with all the possibilities we have inside the company and ensure that those involved are punished severely," said Stephan Weil, the governor of Lower Saxony state, which holds a 20 percent stake in Volkswagen.

Weil added that the company itself would file a criminal complaint, "because we have the impression that criminally relevant actions may have played a role here."

The prosecutors' office in Braunschweig, near VW's Wolfsburg headquarters, said earlier Wednesday that they are collecting information and considering opening an investigation against employees of VW who might be responsible.

Prosecutors said they already received "several" criminal complaints. Anyone can file a criminal complaint in Germany, and prosecutors must decide whether to act on them.

- AP