Consumer Reports: Tesla and other U.S. car manufacturers drop in rankings

SAN JUAN – Consumer Reports’ (CR) latest Annual Auto Reliability Survey, which collected data from its members about their experiences with more than half a million vehicles, found that Buick, Chevrolet, Chrysler and Tesla are among the brands that tumbled in the organization’s predicted new-car reliability rankings, which were announced Wednesday.

The nonprofit membership organization that provides product testing and ratings said every U.S. automaker landed in the bottom-half of its reliability rankings. Ford ranks the highest at 18, down three spots from the previous year. Right below Ford on the list is Buick, which had performed well in recent years and was in the top 10 last year. Cadillac is the worst-rated domestic manufacturer and ranks near the very bottom at 28.

Asian brands, led by Lexus, Toyota, and Mazda, in that order, continue to be the best for new car reliability in CR’s survey. Seven of the top 10 brands in this year’s reliability rankings are from Japan and South Korea, including Subaru, Kia, Infiniti, and Hyundai.

Three European brands, Audi, BMW, and Mini, round out the top 10. Audi and BMW both declined from last year. Three other brands, Porsche, Volkswagen, and Mercedes-Benz, finished midpack. Volvo finished last overall.

Tesla fell six spots from last year and now ranks third-worst (27 out of 29).

“Time and again, consumers tell us that reliability is what matters most when it comes to choosing a vehicle that will meet their families’ needs,” said Marta L. Tellado, president and CEO of Consumer Reports. “That’s why we conduct this exhaustive survey each year—to equip people with the trustworthy information they need to make confident choices, which in turn helps drive the market toward even greater reliability.”

Consumer Reports’ prediction of new-car reliability is a key element of CR’s Overall Score. The score also includes road-test performance, owner satisfaction survey results, whether a vehicle comes with key safety systems, and results from crash tests, if applicable.

For more information on CR’s annual #CRCarReliability survey, visit CR.org/reliability.

Newly Recommended Models with Improved Reliability

Cadillac XTS Chevrolet Cruze
Chevrolet Suburban Chrysler 300
Dodge Charger Infiniti QX60
Lincoln Continental Mazda CX-9
Mazda MX-5 Miata Mini Cooper
Mini Countryman Nissan Armada
Nissan Maxima Subaru Impreza
Volkswagen Golf Volkswagen Tiguan
Source: Consumer Reports Auto Reliability Surveys 2013-2018

No Longer Recommended Models with Declining Reliability

BMW X1 BMW X3
Chrysler Pacifica Ford Fusion
Genesis G90 Honda Clarity
Honda Odyssey Kia Cadenza
Lincoln MKZ Mercedes-Benz E Class
Tesla Model S
Source: Consumer Reports Auto Reliability Surveys 2013-2018



U.S.-Europe trade war must be avoided: German carmakers

FRANKFURT – German carmakers said on Monday that a trade war between the United States and Europe must be avoided, expressing their profound concern after U.S. President Donald Trump threatened to tax car imports.

“Punitive duties can’t be the answer,” Bernhard Mattes, president of Germany’s VDA automotive industry association, said in a statement.

“A trade war between the USA and Europe must be avoided at all costs. In such a trade war there are only losers on all sides.”

Employees of German car manufacturer Porsche assemble sports cars at the Porsche factory in Stuttgart-Zuffenhausen, Germany, January 26, 2018. (REUTERS/Ralph Orlowski)

Trump at the weekend threatened to tax European car imports if Brussels retaliates against his plan to slap tariffs on imports of steel and aluminum as part of his “America First” trade policies.

The VDA, which represents automakers Volkswagen, BMW and Daimler pointed out that their auto production in the United States at 804,000 units was greater than their exports from Germany and was growing.

German exports amounted to 494,000 cars last year – a fall of a quarter since 2013.

More than half of the vehicles made in the United States by German carmakers are exported, the VDA added, supporting the U.S. foreign trade balance.

Trump’s threat to launch a trade war has encountered resistance from fellow Republicans, including Senator Lindsey Graham of South Carolina, where a BMW plant employs 9,000 workers.

(Reporting by Ilona Wissenbach; writing by Douglas Busvine; editing by Maria Sheahan and Jason Neely)




VW plots return to relevance in US following diesel scandal

CHATTANOOGA, Tenn. — Volkswagen is rolling out its plan for re-selling most of the cars involved in the German automaker’s diesel emissions cheating scandal.

Volkswagen brand head Herbert Diess told reporters after a board meeting at Volkswagen’s lone U.S. plant in Tennessee on Thursday that the fallout from the scandal “is something we need to live with” as the company seeks to regain relevance and market share in the United States.

“The brand suffered a lot worldwide, we are suffering still,” he said. “And for sure we are not through.”

Workers produce vehicles at Volkswagen’s lone U.S. plant in Chattanooga, Tenn., on Thursday, Aug. 31, 2017. (Erik Schelzig/AP)

It has been more than a year since Volkswagen agreed to pay more than $20 billion to settle criminal charges and civil claims related to the company’s sale of nearly 600,000 cars with “defeat devices” designed to beat U.S. emissions tests.

The first batch of retrofitted vehicles includes new 2015 models that went unsold following the cheating revelations. Dealers who received diesels as part of Volkswagen’s buyback program will get the right of first refusal for those vehicles as they enter the used market, said Hinrich J. Woebcken, head of Volkswagen Group of America.

“After that, there are several channels to remarket them in a controlled way, so they don’t come all at once to the market,” he said. “We want to ensure the residual (resale) values of those cars remain stable.”

Higher-mileage and more heavily used vehicles will be scrapped.

The management meeting in Chattanooga comes as Volkswagen ramps up production of the new seven-seat Atlas SUV, the best example so far of the company’s shift away from its small car roots and part of renewed efforts to become a volume brand in the U.S. The goal is to grow market share from below 2 percent to more than 5 percent, Diess said.

“It’s a long term plan, we can’t win America over in two years’ time,” Diess said. “It’s a 10-year plan, but we are committed.”

To get to 5 percent, VW would have to pass Lexus, Mercedes-Benz, Dodge, Ram, Subaru, GMC, Hyundai, Kia and Jeep. All of those brands had less than 5 percent market share as of July 31.

Volkswagen has confirmed it will introduce an electric version of its iconic microbus in 2022, but no decision has been made about where to build it. VW minibuses haven’t been sold in the U.S. since the 1970s, but a prototype of the new version was met with great excitement when Diess showed it off in California last month.

“We have a beautiful heritage with ups and downs, and we have the dreadful history now of the past two years, which was a very difficult period for us,” Diess said. “But we think that we get a second chance from the American customers.”

Any additional U.S. production beyond the Atlas and the Passat sedan would be accommodated at the site of Volkswagen’s existing plant in Chattanooga.

“We wouldn’t need a new plant,” he said. “This plant still has a lot of capacity, and we want to fill that.”

Volkwagen’s U.S. plans don’t include a pickup truck.

“It would be a very risky move, because American players are so strong,” he said. “We would have to invent something really special, and it’s not really Volkswagen’s heritage.”

Volkswagen’s plans involve giving more flexibility to the North American region to tailor vehicles to local demands. Matthias Erb, the chief engineering officer for Volkswagen’s North American region, said the decentralization of decision-making represents “an unbelievable shift in the culture” at the company long known to be slow to recognize American desires such as cup holders and other creature comforts.

Erb said one example of the new approach was the local decision to call the new SUV the Atlas in North America — it is sold under the Teramont name in other markets.

“We renamed it,” he said. “Five years ago, we would have been fired.”




German regulator probes Daimler, Volkswagen over reports

FRANKFURT — Germany’s financial regulator says it is checking whether automakers Daimler and Volkswagen violated securities disclosure rules by not telling investors about any self-reporting they may have done to regulators about possible collusion.

Media reports have said the companies self-reported to competition authorities as a way of limiting any fines if they are found to have restrained competition. The EU competition authority has said it is evaluating the information.

The BaFin agency said Monday it was checking if the companies violated requirements to tell shareholders as soon as they have information that could affect the stock price.

Der Spiegel magazine reported that German auto companies colluded for years on technical matters including limiting the size of the tanks holding the urea solution used to neutralize pollutants in exhaust gases.




VW executive pleads guilty in emissions scandal

By Corey Williams

DETROIT —  A German Volkswagen executive pleaded guilty Friday to conspiracy and fraud charges in Detroit in a scheme to cheat emission rules on nearly 600,000 diesel vehicles.

Shackled at the wrists and ankles and wearing red prison garb, Oliver Schmidt appeared before U.S. District Judge Sean Cox as part of the U.S. government’s case involving the automaker, which has admitted to using software to get around U.S. emission standards.

Schmidt, 48, is a former manager of a VW engineering office in suburban Detroit who was arrested in January while on vacation in Miami. He faces up to five years in prison for conspiracy to defraud the U.S., wire fraud and violation of the Clean Air Act. A second count of giving false statement under the Clean Air Act carries a possible sentence of up to two years in prison.

He remains jailed and is scheduled to be sentenced Dec. 6. He also could face deportation.

Schmidt is accused of telling regulators technical problems were to blame for the difference in emissions in road and lab tests.

“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” Deputy Assistant Attorney General Jean E. Williams, who is in the Justice Department’s Environment and Natural Resources Division, said in a news release following Friday’s plea.

Schmidt’s attorney declined to comment after the plea hearing.

VW pleaded guilty in March to defrauding the U.S. government and agreed to pay $4.3 billion in penalties, on top of billions more to buy back cars. Most of the VW employees charged in a scheme are in Germany and out of reach of U.S. authorities.

U.S. authorities had been pressing Volkswagen over emissions test discrepancies and the cheating had been going for several years. In 2015, news emerged in the U.S. of Volkswagen’s use of software that turned off emissions controls.

The software detected when cars were being tested and turned the emission controls off during normal driving. The result was the cars emitted more than 40 times the U.S. limit for the pollutant nitrogen oxide.

Schmidt told Cox on Friday that VW management directed him in 2015 not to discuss the software.

Some 11 million cars worldwide were equipped with the software. Meeting U.S. emissions standards were part of the company’s “clean diesel” marketing strategy.

“You knew these representations made to U.S. consumers were false,” Cox told Schmidt.

VW reached a $15 billion civil settlement in the U.S. with environmental authorities and car owners.




VW and regulators agree on fix for cars in cheating scandal

WASHINGTON — Volkswagen and U.S. environmental regulators announced agreement Thursday on a plan for the German automaker to fix most of the diesel cars involved in an emissions cheating scandal.

The company said the Environmental Protection Agency and the California Air Resources Board have approved the program, which involves about 326,000 VW cars sold between 2009 and 2014. That’s the first generation of the “Clean Diesel” cars with 2.0 liter TDI engines, including the Jetta, Golf, Beetle and Audi A3.

Under the plan, VW owners can either choose to have their emissions systems repaired for free or have the company buy back their vehicles. The company says the fix does not impair driving performance.

With the deal, Volkswagen said it has completed plans covering about 98 percent of all the affected cars with 2.0 liter engines sold in the United States.

It has been more than a year since VW agreed to pay more than $15 billion to settle criminal charges and civil claims related to the company’s sale of nearly 600,000 cars with “defeat devices” designed to beat U.S. emissions tests.

Volkswagen has admitted that the cars were sold with illegal software programmed to turn on emissions controls during government lab tests and turn them off while on the road. Investigators determined that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems in humans. The company got away with the scheme for seven years until independent researchers reported it to government regulators.

Retrofitting the older “Generation 1” cars to meet U.S. air quality standards represented was an engineering challenge for VW because the cars were not designed to do so in the first place.

The approved fix involves both software and hardware changes that would be installed at dealerships across the United States. Technicians will erase the defeat device software and upload new software that the company says directs the emission controls to function effectively. VW will replace the catalyst that scrubs smog-causing nitrogen oxide from the vehicles’ exhaust.

VW is spending more than $20 billion to cover the cost of the global scandal, which includes a total of 11 million vehicles worldwide.

Associated Press Auto Writer Tom Krisher in Detroit contributed to this report.

 




Germans arrest suspect in Volkswagen case after US charges

The four ring logo of German car producer Audi (AP Photo/Matthias Schrader, File)

BERLIN – German prosecutors said Friday they have arrested a former employee of the Volkswagen unit Audi in connection with the company’s diesel scandal.

The office of the prosecutors of the city of Munich said the man worked in engine development in the southern German city of Neckarsulm and is accused of fraud and unfair advertising.

The prosecutors did not confirm whether the individual was Giovanni Pamio, who was accused Thursday by U.S. authorities of giving the orders to program diesel engines to cheat on emissions tests.

Pamio, 60 and an Italian citizen, is a former Audi executive and based in Neckarsulm.

He’s the eighth former Volkswagen employee charged in the case that is being investigated by the FBI and the Environmental Protection Agency’s criminal unit. One of the employees is scheduled for sentencing this month, another is in custody in the U.S. and five others are German citizens.

Volkswagen has admitted that its Volkswagen, Porsche and Audi vehicles with 2-liter and 3-liter diesel engines were programmed to turn pollution controls on during government treadmill tests and turn them off while on the road. The scheme went on for years before being discovered in tests conducted by West Virginia University. The scandal has cost Volkswagen more than $20 billion in criminal penalties and lawsuit settlements.

According to a criminal complaint filed Thursday in Detroit, Pamio is charged with conspiracy, wire fraud and violating the Clean Air Act.

The U.S. Attorney’s Office said Cleveland attorney Terry Brennan was representing Pamio. Brennan would not comment when reached Thursday evening.

The complaint says Pamio was head of Thermodynamics in Audi’s Diesel Development Department in Neckarsulm, leading a team of engineers who designed emissions controls from 2006 through November of 2015.

He and other unidentified conspirators determined it was impossible to calibrate a 3-liter diesel engine to meet U.S. nitrogen oxide emissions standards within design constraints imposed by other VW departments. So Pamio “directed Audi employees to design and implement software functions to cheat the standard U.S. emissions tests,” the U.S. Attorney’s Office said in a statement.

Pamio and others then failed to disclose the software and knowingly misrepresented that the engines complied with U.S. pollution standards, according to the complaint.

In 2008, engineers who designed the cheating system sent a presentation to Audi senior management, including Pamio, that detailed it, according to the complaint. That year, several Audi managers concluded the software was “indefensible.” An Audi manager in 2013 sent an email about discussing the system with U.S. regulators, but Pamio, the complaint stated, argued that disclosure would be “too risky!”

Volkswagen already has pleaded guilty to criminal charges and agreed to pay a $2.8 billion penalty.




German prosecutors investigating VW’s Mueller over scandal

By David McHugh and David Rising

BERLIN — Stuttgart prosecutors said Wednesday they’re investigating whether Volkswagen CEO Matthias Mueller and two others, including Mueller’s predecessor, manipulated markets by not releasing information about VW’s diesel cheating soon enough.

The probe relates to Mueller and the others’ roles as executives in 2015 at Stuttgart-based Porsche Automobil Holding SE, the holding company that controls Volkswagen.

Prosecutors in a statement confirmed media reports that Germany’s Federal Financial Supervisory Authority filed a complaint in 2016 asking prosecutors to investigate executives from the holding company.

In this May 10, 2017 file photo Matthias Mueller, CEO of the Volkswagen AG, attends the annual shareholders meeting in Hannover, Germany.  (Michael Sohn, File/AP)

They said they’re investigating whether the executives delayed releasing information about VW’s manipulation of software to cheat on emissions tests, and its possible financial implications on the holding company.

German securities law requires companies to broadly and quickly disclose information that could affect decisions to buy or sell the company’s shares.

Porsche SE said in a statement that “we are convinced that we have duly fulfilled our capital market disclosure requirements.”

In addition to Mueller, who is strategy and development chief at the holding company, those under investigation are Hans Dieter Poetsch, who is CEO of the holding company as well as Volkswagen board chairman, and Martin Winterkorn, the former Volkswagen and holding company chief executive who quit after the scandal broke in 2015.

The Porsche holding company is distinct from Porsche sports car brand, which is now part of Volkswagen itself. The holding company’s shareholders are members of the Piech and Porsche families, descendants of automotive pioneer Ferdinand Porsche.

Volkswagen has admitted equipping around 11 million cars worldwide with software that sensed when cars were on test stands and turned emission controls up, then turned the controls off during every day driving to improve performance.

It has agreed to at least $16 billion in civil settlements with environmental authorities and car owners in the United States, and to a $4.3 billion criminal penalty. Seven Volkswagen executives have been criminally charged in the U.S. The company also faces investor lawsuits in Germany alleging it did not inform shareholders of the scandal quickly enough. Volkswagen says it met its duties.

The company apologized for the scandal and says it is changing its culture and practices.




Volkswagen to pay $2.8 billion in US diesel emission scandal

(Damian Dovarganes, File/AP)

(Damian Dovarganes, File/AP)

DETROIT – A judge on Friday ordered Volkswagen to pay a $2.8 billion criminal penalty in the United States for cheating on diesel emissions tests, blessing a deal negotiated by the government for a “massive fraud” orchestrated by the German automaker.

U.S. District Judge Sean Cox stuck to the plea deal during the sentencing hearing, six weeks after VW pleaded guilty to conspiracy and obstruction of justice in a scheme involving nearly 600,000 diesel cars in the U.S. They were programmed to turn on pollution controls during testing and off while on the road.

Speaking from the bench in the heart of the global auto industry, Cox said he was amazed that VW would commit such a crime.

“Who has been hurt by this corporate greed? From what I can see it’s not the managers at VW, the ones who get paid huge salaries and large bonuses. As always it’s the little guy,” the judge said, referring to car buyers and VW’s blue-collar workers who might earn less in the future.

Separately, VW is paying $1.5 billion in a civil case brought by government regulators and spending $11 billion to buy back cars and offer other compensation.

Seven employees have also been charged with crimes in the U.S., but five are in Germany and are unlikely to be extradited.

Cox urged the German government to “prosecute those responsible for this deliberate massive fraud that has damaged an iconic automobile company.”

In brief remarks to the judge, VW defense attorney Jason Weinstein says the criminal fine is an “appropriate and serious sanction.”

VW general counsel Manfred Doess said the company is not the same one that was caught 18 months ago.

“Volkswagen deeply regrets the behavior that gave rise to this case. … Plain and simple it was wrong,” Doess said. “We let people down and for that we’re deeply sorry.”




VW to pay over $157M to settle emissions claims by 10 states

FILE - In this Nov. 18, 2016 file photo the Volkswagen logo is photographed through rain drops on a window in Frankfurt, Germany. Volkswagen has agreed to pay at least US$ 1.2 billion in buybacks and compensation to settle claims from U.S. owners of cars with larger diesel engines that the company rigged to cheat on emissions tests. The proposed settlement filed late Tuesday, Jan. 31, 2017 in U.S. District Court in San Francisco covers owners of some 75,000 Audi, Volkswagen and Porsche cars with 3.0-liter diesel engines. (AP Photo/Michael Probst)

In this Nov. 18, 2016 photo the Volkswagen logo is photographed through rain drops on a window in Frankfurt, Germany. (AP Photo/Michael Probst)

DETROIT – Volkswagen is paying more than $157 million to 10 states to settle environmental lawsuits over the company’s diesel emissions-cheating scandal.

The company says the money will go to Connecticut, Delaware, Maine, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington. All 10 states follow California’s clean air standards.

The settlement covers 3-Liter six-cylinder diesel engines and is separate from a $603 million agreement reached last year with 44 states, Washington, D.C., and Puerto Rico that covered 2-liter engines.

Volkswagen has admitted to programming its diesel engines to activate pollution controls during government treadmill tests and turning them off for roadway driving.

VW has paid out more than $20 billion to buy back or repair cars and pay criminal and civil fines and legal settlements related to the scandal.