Volkswagen to fight ‘unnecessary’ ACCC proceedings

Volkswagen Australia boss Michael Bartsch insists the company has not breached Australian emission standards.

Volkswagen Australia is standing firm in the face of Federal Court proceedings against it that could cost it millions of dollars, insisting it remains unaware of having broken any Australian laws or emissions standards.

The Australian Competition and Consumer Commission (ACCC) last week instituted the proceedings against Volkswagen Australia and parent company Volkswagen Aktiengesellschaft for “alleged serious and deliberate breaches of the Australian Consumer Law”. These include “making false or misleading representations and engaging in conduct liable to mislead the public in relation to diesel vehicle emissions”.

The ACCC action comes almost a year since the “Dieselgate” scandal erupted in the US, when the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to Volkswagen after it was found it had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate certain emissions controls only during laboratory emissions testing.

Volkswagen will contest the Australian Federal Court action, which it described as unnecessary.

In a statement, the VW said the best outcome for customers whose vehicles are affected is to have the voluntary recall for emissions control software updates installed.

The company’s stance reaffirms Volkswagen Australia managing director Michael Bartsch’s views on the matter from two weeks before the ACCC announcement, when he appeared confident of a resolution.

Speaking at a company luncheon with motoring journalists and representatives in Melbourne last month, Bartsch stressed that US and Australian emissions testing regimes were very different and blamed the ACCC and the Department of Development & Research (DIDR) for the delay in the recall of 100,000 affected vehicles to “fix” the software.

“We have had the fixes endorsed by the KBA (Germany’s Federal Motor Transport Authority) for 70 percent of our vehicles with the DIDR since June 2nd,” Bartsch said.

“There are some 77 primary markets in the world that homologate under the EU standard. Seventy six of those countries have accepted the KBA endorsed fixes that have been rolled out … there’s only one country that hasn’t, that’s Australia.”

“We’re expecting and we’re hoping to get the release on those fixes in the next week but it now lies in the court of the DIDR and the ACCC.”

Bartsch appeared hopeful of a resolution, saying he thought the basic philosophy of the ACCC and Volkswagen were the same.

“We both agree that the best interests of the consumers is served by getting the vehicles fixed and getting them fixed as soon as possible,” he added.

His confidence was at odds with ACCC chairman Rod Sims, who said he had found discussions with Volkswagen regarding the proceedings to be “difficult”.

“I guess the Volkswagen chief executive has been quoted as saying they don't believe they have breached Australian law, so that has been the starting point," Sims told Fairfax Media.

"It has not been easy, it's been difficult to get information and the cooperation we would have hoped for."

Different standards

The ACCC says the Australian Design Rules implement international standards that regulate the emission of NOx (Nitrogen Oxide) from motor vehicles, but Bartsch said cars sold in Australia are tested to European Union standards which measure Carbon Dioxide (C02) emissions and fuel economy.

“The legislation that drives emission standards in the United States driven by CARB (California Air Resources Board) and managed by the US EPA focuses on NOx as the primary consideration. The EU model focuses on CO2 and fuel economy – different priorities,” he said.

Bartsch, who took the reins at Volkswagen Australia just as the Dieselgate scandal erupted in the US last year, insisted that all the vehicles named in the ACCC proceedings had exceeded the standard for vehicles sold in Australia, using the Amarok ute as an example of why the US Dieselgate situation isn’t directly relatable with Australia.

He explained that Amaroks imported from Argentina were legal in Australia under EU4 regulations where the maximum nitrogen oxide output allowed is 390grams per kilometre driven. He said the Amarok was homologated to the higher EU5 standard, which allows for 280grams per kilometre driven, and only produced 220 to 230 grams.

“So the car was homologated substantially below the legislative requirements of Australia.”

He added when the Amarok had the emissions software fixed according to the rectification protocols approved by the KBA it still came still came out at 220 to 230 grams of nitrogen oxide per kilometre driven.

“To put that into context with the US, that two-litre motor in the US under the CARB legislation – the maximum nitrogen oxide output allowed is 30grams. So you can see that as a consequence of the homologation protocols it’s two very, very different legislative environments.”

The ACCC declined to respond to Bartsch’s explanation “as the matter is now before the court”, but on announcing the action Sims said consumers rightly expect that their vehicle’s emissions would operate as advertised.

“We allege that this was not the case with more than 57,000 vehicles sold in Australia by Volkswagen over a five-year period.

“We expect higher standards of behaviour from all companies that supply to Australian consumers,” Sims said.

Diesel-powered VW vehicles covered by the ACCC proceedings:

• Amarok 2.0 litre – 2011 to 2012
• Caddy 1.6 and 2.0 litre – 2010 to 2015
• Eos 2.0 litre – 2009 to 2014
• Golf 1.6 and 2.0 litre – 2009 to 2013
• Jetta 1.6 and 2.0 litre – 2009 to 2015
• Passat 2.0 litre – 2008 to 2015
• Passat CC 2.0 litre – 2008 to 2012
• Polo 1.6 litre – 2009 to 2014
• Tiguan 2.0 litre – 2008 to 2015
• CC 2.0 litre – 2011 to 2015