VW warned of $1.1m fine in Australia

VOLKSWAGEN has been warned it faces a potential fine of $1.1 million if the Dieselgate emissions scandal widens to include Australian customers.

The Australian Competition and Consumer Commission said today that while Volkswagen was yet to reveal whether Australian cars were affected by the use of “defeat devices” to reduce emissions, the penalty it faced if it had cheated Australian emissions rules was substantial.

“This enforcement investigation is a priority for the ACCC. We are very concerned about the potential consumer and competition detriment from this alleged conduct,” ACCC chairman Rod Sims said in a statement.

“First, using defeat devices is specifically prohibited under the Australian Design Rules, which are picked up as Australian consumer law mandatory safety standards,” Mr Sims said.

“As the enforcer of [consumer laws], the ACCC can take action against any corporation that has breached mandatory standards.

“Secondly, cars are a big purchasing decision and claims that relate to environmental benefits or fuel efficiency can influence consumer choice,” he said.

Volkswagen is yet to say whether the emissions cheats are effective in Australian cars with the EA189 diesel engine, so that the vehicles spew out much more of harmful pollutants in normal use than in official tests.

The ACCC has asked Volkswagen Group to stump up advertising material used to sell its cars here, saying it “will not hesitate to take action if consumers were exposed to false, misleading or deceptive representations”.

It said it was also “considering” comments made by Audi Australia on how its customers were affected.

The move by the consumer advocacy group comes as a Volkswagen Group director representing the German district of Saxony – an influential 20 percent stakeholder in the carmaker – said he believed VW staff responsible for the deception had acted criminally.

“Those people who allowed this to happen, or who made the decision to install this software, they acted criminally,” Lower Saxony economy minister Olaf Lies told the BBC overnight.

“They must take personal responsibility. It’s about finding out who was responsible, who knew about it and when they found out.”

According to Lies, Volkswagen’s global board found out about the defeat device, which allowed cars to recognise when the vehicle was being emissions tested and switch into a low-pollution mode, “shortly before the media did”.

He said the board had no idea how much the scandal would eventually cost the carmaker.

“We are surely going to have a lot of people suing for damages,” Lies said. “We have to recall lots of cars and it has to happen really fast.”

German prosecutors have opened an investigation into the VW emissions scandal, but have not announced conclusions on whether crimes were committed.