+++ In the United Kingdom, the number of accidents involving drivers who were under the influence of prescription and illegal DRUGS has doubled over the course of 5 years, new British government figures have revealed. There were 594 accidents in 2013 where 1 or more of the drivers involved was under the influence of drugs. In the space of 5 years, though, this number skyrocketed, reaching 1,321 in 2018. In addition, drug driving caused 80 fatal accidents in 2018, compared with just 31 in 2013. The latest data from the Department for Transport (DfT) also shows the number of deaths on urban roads rose 3 % year-on-year in 2018, to 646. Meanwhile, the number of people killed on motorways increased 8 % to 107. On another worrying note, the number of people aged 60 and over killed on the UK’s roads increased 5 % year-on-year, from 559 in 2017 to 588 in 2018. The number of children aged under 15 killed on UK roads increased from 22 to 28 over the same period. Motoring group the RAC accused the DfT of “complacency” on the matter of road safety. Its head of policy Nicholas Lyes said: “This latest set of data makes for disappointing reading. In short, there has been no meaningful reduction in fatalities at a national level for 7 consecutive years now. While we welcome the Government’s renewed focus with the publication of its recent road safety statement, there needs to be a significant shift in policy that will result in far fewer serious collisions. Of particular concern are the rises in fatalities among older age groups and a spike in fatalities on motorways; some worrying trends are emerging here that require immediate investigation, to understand the reasons for these increases and what can be done to reduce them. In addition, the Government’s data suggests an increase in motorway collisions where at least one driver has been under the influence of illegal drugs. Historically, Great Britain has been proud of its road safety record, but these figures clearly show that there is no room for complacency”. +++ 

+++ FIAT CHRYSLER AUTOMOBILES and its U.S. unit will pay $40 million for misleading investors about its monthly sales figures and will resolve a lengthy probe by the U.S. Securities and Exchange Commission (SEC). Over a 5-year period from 2012 through 2016, Fiat Chrysler’s U.S. unit used a series of fraudulent moves to falsely report new vehicle sales and falsely tout a “streak” of uninterrupted monthly year-over-year sales growth, when it had actually ended in September 2013. In July 2016, the company revised more than 5 years of monthly U.S. vehicle sales figures to reflect a new reporting method, amid an investigation by federal authorities including the U.S. Justice Department. Fiat Chrysler said Friday it “cooperated fully” and added it has “reviewed and refined its policies and procedures and is committed to maintaining strong controls regarding its sales reporting”. The SEC settlement is not material to its financial results, it added. The SEC said Fiat Chrysler put pressure on its business centers “to increase sales, maintain the year-over-year sales streak, and hit internal sales targets, particularly on the last sales day of the month” and as a result some employees at most of the Business Centers “engaged in fake sales reporting”. Dealers were paid to report fake sales in a company database using “cooperative marketing funds” to disguise the payments, the SEC said, adding the database “contained false vehicle sales entries, including false customer names and dates of sales”. The suit said the company used a database of fleet and certain other retail sales, at the direction of its head of U.S. sales, “to misreport vehicle sales results and year-over-year growth percentages every month”. Employees referred to the vehicle sales saved for public reporting, the SEC said, with terms like “cookie jar”, the “bank”, the “bag”, and the “kitty”. Detroit’s Big Three automakers have ended the practice of reporting monthly sales figures and now report on a quarterly basis. In April, Fiat Chrysler settled lawsuits with 7 of its dealers over claims it urged them to input phony sales to help it meet sales targets for an undisclosed sum, while in May it settled a lawsuit with stockholders for $14.75 million. The Justice Department declined to comment on the status of its investigation. In May, Fiat Chrysler Automobiles’ U.S. sales chief Reid Bigland sued the company claiming it withheld 90 % of his 2018 compensation because he cooperated with the SEC probe. An Oct. 3 hearing is set in the suit. Bigland said in his lawsuit that the company’s sales reporting methodology had been in place since the late 1980s and was widely known throughout the company including by Sergio Marchionne, who was chief executive until his death in July 2018, and other senior executives. +++ 

+++ Secret contracts, backdated letters, creative accounting, financial red herrings: those are just some of the allegations outlined in the fraud complaint that Carlos GHOSN settled for $1 million with the U.S. Securities and Exchange Commission. The American complaint offers the most detailed narrative yet of how the former Nissan chairman allegedly orchestrated the financial misconduct that led to his stunning arrest in Japan last November. It also previews what Japanese prosecutors will likely argue when Ghosn fights his bigger legal battle in court here next year. The SEC painted a picture of a high-flying executive so concerned about a potential public backlash against his handsome compensation package that he and others at Nissan took extraordinary measures to hide some $140 million in future payouts over nearly a decade. In his settlement with U.S. authorities last week, the 65-year-old Ghosn agreed to pay a $1 million civil penalty without admitting or denying the SEC’s allegations or findings. Greg Kelly, the former Nissan director who allegedly conspired with Ghosn, agreed to a $100,000 penalty in a similar settlement. At the same time, Nissan as a corporate entity agreed to pay $15 million. Kelly and Nissan also settled without admitting or denying the SEC’s allegations. Ghosn’s attorneys say the settlement clears away the U.S. cloud so Ghosn can concentrate on battling charges in Japan. Ghosn denies any wrongdoing in his Japan case, as does Kelly. “This civil settlement explicitly confirms that Mr. Ghosn can continue to deny and fight against the alleged facts and the legal arguments the prosecutors have leveled against him”, said Junichiro Hironaka, one of Ghosn’s defense lawyers in Japan. “As long as his right to defense is fully guaranteed and a fair trial held, we are certain he will be acquitted of all changes”. In Japan, the stakes are arguably much higher for Ghosn. The fallen auto titan faces up to 15 years in prison and a fine of up to ¥150 million ($1.4 million) if convicted on all counts. Japanese prosecutors have been tight-lipped about their plan of attack. Public documents here offer only a broad-brush picture of the allegations. However, the SEC’s complaint drew on the assistance of the Tokyo District Public Prosecutors Office and likely mirrors many of its findings. Chief among the SEC’s findings was that Ghosn, Kelly and others at the carmaker concealed more than $90 million in deferred compensation to Ghosn from public disclosure. The SEC also found that they took steps to boost Ghosn’s retirement package by more than $50 million. That $140 million was never paid to Ghosn, but the SEC said the problem was what it called an attempt to hide it. “Investors are entitled to know how, and how much, a company compensates its top executives. Ghosn and Kelly went to great lengths to conceal this information from investors and the market”, said Stephanie Avakian, co-director of the SEC’s Division of Enforcement. According to the SEC, a 2010 rule change by the Japan Financial Services Agency is what started the alleged misconduct. That change required companies to disclose the total compensation of an individual officer or director when the amount was ¥100 million ($930,000) or more. Companies previously were required only to give an aggregate compensation figure of all directors, meaning that Ghosn’s individual compensation was not publicly available. “Ghosn became concerned about criticism that might result in the Japanese and French media if Ghosn’s total compensation became publicly known”, the SEC document said. In the fiscal year ended March 31, 2010, Ghosn’s annual compensation totaled about $15 million, according to the SEC. It climbed to $22 million in the fiscal year ended March 31, 2018. Ghosn, Kelly and others pursued multiple avenues for hiding part of the pay from view, the SEC alleged. In one of them, more than half of the annual compensation due to Ghosn was not reported in Nissan’s securities disclosures. The SEC claimed about $94 million in compensation was concealed this way. Nissan and Ghosn’s next move, according to the SEC narrative, was finding a way to pay out that undisclosed compensation. They considered funneling the money to Ghosn through various Nissan-related entities, such as the Renault-Nissan BV, a joint venture between Renault and Nissan. But this was rejected because it would trigger disclosure requirements. Instead, they settled on a plan to pay some of the money as “consultation fees”, the SEC said. That prompted a series of secret contracts signed by Ghosn that agreed to disburse remuneration after Ghosn’s retirement, the agency said. In 2013, Ghosn and his subordinates found another means to pay the executive, using the company’s long-term incentive plan. But Ghosn hadn’t been enrolled in the plan before. To do that, the participants backdated award letters that would allow Ghosn to reap an amount equal to his unclaimed compensation for the four previous fiscal years, according to the SEC. Meanwhile, Ghosn and Kelly were also trying to inflate Ghosn’s pension allowance by more than $50 million. The SEC alleged that they backdated retirement award letters for Ghosn that used a different calculation for arriving at a higher retirement allowance. To enter the pension increase into Nissan’s accounting system, they falsely claimed that the increase resulted from a mistake in the Nissan Secretariat’s office, the SEC said. They also tried to camouflage the increase as going to multiple people, when it went almost entirely to Ghosn. “As a result of the above misconduct by Ghosn and Kelly, Nissan’s annual securities reports for fiscal years 2009-2017 contained materially false and misleading information”, the SEC concluded. Ghosn now faces a long legal battle in Japan, likely over many of the same issues. +++ 

+++ This month’s Frankfurt Motor Show intrigued and impressed me with its glorious glut of often unproven, comparatively expensive, alternatively fuelled cars for the future, when their petrol and diesel-powered counterparts are supposed to decline before being wiped off the face of the earth. But, as Frankfurt and elsewhere still prove, the death of tried and tested, more easily affordable internal combustion-engined family cars remains decades away. For the foreseeable future at least, such ‘old-school’ beasts remain far more desirable and considerably cheaper to purchase than pure-electric or hydrogen models of similar size. That’s why I, not unreasonably, wanted Volkswagen of Germany to officially launch its all-new Golf at Germany’s national motor show before it closed its doors last Sunday, possibly for the last time if you believe what you hear from some pundits. Trouble is, it refused. Inexplicably, the hugely significant Mk8 Golf was ordered to stay away. Showgoers from Germany and other parts were robbed of one of the most important unveilings of the year for buyers living in the real world. The all-new car was supposed to go on sale in late 2019. But it went AWOL in Frankfurt, which was the most blindingly obvious place to unleash it. Yes, yes, I know that the unknown-quantity, electric-only ID.3 was put forward as VW’s star car. But joint headliner or support act would have been more fitting. Golf has been a loyal servant for almost half a century; it is the second best-selling car ever; no VW has sold in greater numbers; even now it’s available as a petrol, diesel or electric car and is still Europe’s No 1 seller. The bi-annual (up to now!) German Show was big enough for 2 all-new models from Volkswagen in 2019. It’s a great shame that one of ’em went missing in action. So this means the all-new Mk8 Golf will have its first public outing at the next big show (Los Angeles in late November), right? Er, wrong. “There are no plans for it to be at the LA Show”, a spokesman assured me. So we’ll have to wait until Spring 2020: Geneva, correct? VW won’t say. All it will admit is that the Mk8 Golf gets a “launch” in its Wolfsburg home in late October, and that the car “is set to arrive in the showrooms in Spring next year”. VW isn’t holding back from arguing that the flavour of the month ID.3 (zero sold so far) is, according to its crystal ball, the future, whereas the classy, trusted Golf (approximately 35 million sales so far) is much, much more about the past. The promise from the German firm is that “we’re not brushing Golf under the carpet”. Me, I’m not so sure about that. But I am certain that with the questionable appearance, inevitably hefty price tag and comparatively low levels of consumer appeal that ID.3 currently has, it will not overtake Golf sales anytime soon, if ever. +++ 

+++ 5 new JAGUAR cars are on the way in 2020, with Tata-owned JLR due to turn its attention away from Land Rover. While Jaguar has focused on shaping an SUV line-up in recent years, one of the big newcomers will be an updated F-Type. The sports car is due for replacement, with a radical development of the current car set for showrooms next year. It’s been spied numerous times on the Nürburgring and it will get a more chiseled front end. Underneath the subtly reworked metal will be the current F-Type’s aluminium-intensive chassis, albeit with the tweaks necessary to make it compatible with the biggest change: BMW engines. It’s strongly rumoured that JLR sees BMW as a suitor to provide V8 motors in some of the group’s more potent future products. The 2 brands have already struck a deal over next-generation electric tech and it’s anticipated this could make JLR’s decision to take engines from BMW all the easier, with the German marque’s 4.4-litre being lined up for next year’s F-Type. The most powerful version of that engine features in the M8 Competition, where it produces 625 hp and 750 Nm. Should the new F-Type have access to this unit, it’ll provide a respective increase of 50 hp and 70 Nm over the current most powerful model. Inside, Jaguar’s latest flagship sports car should feature a new 10.2-inch infotainment system and digital heater controls, as used by the recently revised Jaguar XE and the all-electric I-Pace. Interior quality will also improve, with a broader range of soft-touch plastics and updated trim. The new F-Type is one of three ‘F’ models due a refresh next year. The F-Pace SUV is ready for a facelift, with a minor design tweak, plus a whole new dashboard, featuring more tech including an iPad-style touchscreen. This dash will also appear in the XF saloon, along with subtle exterior design upgrades. Jaguar’s E-Pace is set for a more radical overhaul in 2020. The baby SUV is the last remaining Jaguar Land Rover product still based on the heavy, ageing D8 platform, whose origins can be traced back to the brands’ spell under Ford ownership. Launched in 2017, the car should be due a facelift by the middle of 2021. But understands that the E-Pace will follow the Discovery Sport by getting a much more substantial mid-life overhaul that will, in fact, take it onto JLR’s latest platform, called PTA (Premium Transverse Architecture). This process has even been fast-tracked, so the new E-Pace is now tipped to appear before the end of 2020. Moving to PTA will allow a number of key improvements on the E-Pace, including the adoption of JLR’s latest 10-inch infotainment and upgraded electrics. But the biggest gains will come in efficiency, because PTA allows 48-volt mild-hybrid powertrains and, eventually, a plug-in hybrid E-Pace that mixes 1.5-litre petrol power with an 109 hp motor driving the rear wheels. Jaguar design chief Julian Thompson declined to confirm that this E-Pace was due an imminent upgrade, but he said, “It’s logical that all the cars follow these cycles; they’ll all have similar improvements. When we have the opportunity to do so, we always want to enhance them and improve the refinement, the luxury and the technology in all of our cars. And their efficiency”. The 2020 quintet should be completed by the brand’s next-generation flagship. The new XJ will be revealed and it’ll be all-electric, using a brand-new, dedicated platform. It will be built at Castle Bromwich. Expect the unexpected; at the 2019 Frankfurt Motor Show, Thompson explained what he has in mind for the XJ’s interior: “We’ve got a cabin that is full of light, full of space, very calming, beautiful to look at, a lot of sustainable materials involved. And it just fits the electric car so beautifully. We don’t want to do a traditional, formal, long-wheelbase sedan. We want to do something very exciting; it’s going to be our spin on it; it won’t be like other manufacturers’ ”. +++ 

+++ JAGUAR LAND ROVER (JLR) believes battery power might not be the right solution for its largest SUVs as the automaker moves toward its ultimate goal of reducing emissions from its vehicles to zero. The SUV body style is problematic because it needs more energy to overcome wind resistance, requiring a bigger battery pack. “The larger the vehicle the larger the aero challenge. If you’re not careful you end up with such big batteries and you make the vehicles so heavy that as you race down the autobahn the range disappears”, Nick Rogers, JLR head of engineering, told. Land Rover is currently adding plug-in hybrid models to its range, including the new Defender, but has so far not announced a pure electric model. Jaguar was the first mainstream premium brand to offer an electric vehicle when it launched the I-Pace SUV, which sits lower than Land Rover’s SUVs, helping its range. Making Land Rover’s largest SUVs zero emission will “potentially bring other technologies into play”, Rogers said, citing hydrogen fuel cells as “something to look at”. JLR appointed a new head of hydrogen and fuels cells in March this year, but so far has not announced any research initiative using the technology. The appointee, Ralph Clague, was previously director of fuel cell R&D at China’s Great Wall Motor. In 2016 JLR’s former technical director, Wolfgang Ziebart, dismissed fuel-cell powered cars as “complete nonsense”, mainly because their wheel-to-well emissions were a “disaster”. Rogers described hydrogen as a “fantastic” solution because its rapid fill-ups, but said it remained problematic in terms of emissions. “It only makes sense if you’re creating the hydrogen with renewable energy”, he said. A common way to make the fuel uses electricity to split water into hydrogen and oxygen. JLR could benefit from its partnership with BMW after agreeing in June to work with its German rival on electric drive units. BMW is currently collaborating with Toyota on fuel cells and will launch a test fleet of fuel cell versions of the X5 and X7 in 2021. However, BMW said it backs batteries over fuel cells for creating zero-emission cars. “The development we expect for battery density would make electric cars the most-efficient solution”, Klaus Fröhlich, BMW Group board member for development, said on the sidelines of the company’s NextGen event in June. Frölich said a fuel cell powertrain is 10 times more expensive than a full-electric one. The prices will not be comparable until about 2025, he said. +++ 

+++ The next MERCEDES-BENZ C-Class has been redesigned from the ground up, with highly efficient new hybrid drivetrains and advanced autonomous driving technology set to be some of its key draws. Having experienced a sharp drop in C-Class sales in recent years because of the universal gravitation of buyers towards SUVs, the German maker is providing the fifth-generation model with many of the developments being readied for the new S-Class. The new C-Class, codenamed W206, will challenge the recently facelifted Audi A4 and new BMW 3 Series when it arrives in the showrooms in 2021. As evidenced by the latest prototypes, the design of the new C-Class is a clear evolution of the styling seen on today’s model. Although its exterior features a new-look front end with more angular headlights, the new car’s proportions, dimensions and overall silhouette remain very close to those of the model it replaces. The starting point for the new C-Class is Mercedes’ MRA (Modular Rear Architecture) platform. It offers a number of advances over the earlier version of the steel and aluminium structure. These include, according to insiders, more advanced electrical architecture that supports a 48 Volt system, which is key to providing the 2021 model with a new range of plug-in hybrid drivetrains. The MRA structure uses a double-wishbone front and multi-link rear suspension, with adaptive damping likely to be offered as standard across the range in most markets, including the UK. The new C-Class will continue to provide the option of rear air springs on selected models. As well as being used by the C-Class saloon, estate, coupé and cabriolet, the new platform will underpin successor models to the GLC and GLC Coupé, with a choice of both rear-wheel drive and optional four-wheel drive. As an addition to the existing line-up, Mercedes has given the green light to a new Audi A4 Allroad rival in the C-Class All Terrain model. Based on the standard estate, it will receive more rugged styling, with unique bumpers and wheel-arch cladding, increased ride height and beefed-up underbody protection measures already brought to the larger E-Class All Terrain. The engine line-up for the fifth-generation C-Class will consist primarily of 4-cylinder petrol and diesel engines featuring a choice of EQ Boost mild-hybrid and EQ Power plug-in hybrid functions in combination with either a starter/generator or gearbox-mounted electric motor. New electric motor and battery technology should increase the efficiency of future hybrid drivetrains, although the plug-in C-Class is likely to continue to offer the 50 kilometre range of the current C300de at the start of sales. Despite the focus on efficiency, Mercedes is also planning successor models to today’s C 43 and C 63. The C 43’s 3.0-litre inline 6-cylinder petrol engine will adopt mild-hybrid tech, but the C 63 is set to continue with an updated version of today’s 4.0-litre V8 petrol engine, with up to 550 hp in a new range-topping C63 S 4Matic+. That will use a fully variable four-wheel-drive system rather than today’s rear-driven set-up. In a bid to make the new C-Class the most advanced car in its class, Mercedes will bring in the very latest autonomous driving features to set what one source involved in its development has described as “new standards in human-machine interface in the automotive field”. Leading the push is a new Drive Pilot function with level three functionality. Due to make its debut on the seventh-generation S-Class in 2020, it will allow hands-off driving at speeds of up to 130 kph for extended distances. This brings a whole new range of sensor functions, including long-range lidar, multi-mode radar, the latest ultra-sonic sensors and a new stereo camera from Korean supplier LG. It also provides the basis for a new Level 4 automated valet parking function developed by Mercedes in partnership with Bosch. It allows the new C-Class to negotiate parking garages and manoeuvre into free parking spaces; all via a smartphone app interface. Advanced adaptive cruise control will allow the C-Class to follow the car ahead at speeds of up to 200 kph, slowing down automatically when speed limits change. It will also support the usual active lane change, lane keeping, emergency stop and brake assist with cross-traffic functions. To make the most of these functions, the C-Class’s new interior will be inspired by the earlier Concept EQ. It will feature large digital displays incorporating both the instruments and infotainment functions as well as new touch-based controls in a less bulky dashboard. This will also provide a greater feeling of interior space, it is claimed. +++

+++ MITSUBISHI is working on an all-new Outlander SUV. It was previewed by the Engelberg Tourer concept at the 2019 Geneva Motor Show and, like the concept, the production model looks set to feature a bold new design language and fresh plug-in hybrid technology. I expect the fourth-generation Outlander will go on sale in 2020. The styling of the new Outlander will be remarkably similar to that of the Engelberg Tourer. It shares the concept’s boxy proportions, high-mounted daytime running lights, flat bonnet and unconventional 3-pronged LED headlamps. The front end also carries the latest interpretation of the brand’s “dynamic shield” radiator grille design. Mitsubishi is yet to confirm specifications for the new Outlander’s powertrain, but we expect it will feature the new plug-in hybrid technology previewed by the Engelberg Tourer. The concept is powered by an updated version of the 2.4-litre 4-cylinder petrol-electric powertrain found in the outgoing Outlander PHEV. I expect the new Outlander PHEV’s powertrain will be broadly similar to the outgoing model’s, with the internal combustion engine being supplemented by a pair of electric motors. However, like the Engelberg Tourer it will feature a larger battery pack than the current Outlander’s 20 kWh unit, offering a claimed all-electric range of 70 kilometres. The next Outlander will gain a new infotainment system design, with the old car’s dated dash-mounted screen being replaced by a new high-mounted unit. A digital instrument binnacle will probably feature too, while interior quality should be improved over the outgoing model. +++ 

+++ NISSAN ‘s South Korean unit denied an earlier media report that the automaker may be pulling out of the country. The Financial Times reported earlier this month that the automaker was considering exiting South Korea, as political and trade tensions between Tokyo and Seoul have led to a drop in Japanese product sales in the neighboring country. “We make it clear that Nissan Korea will continue its activities in South Korea, which is a strategically important market”, Nissan Korea said. Nissan Korea also said it will overcome “difficulties” by revamping its operations in Korea. +++ 

+++ The Volkswagen Group is planning on further separating its SEAT and SKODA brands by pushing the first upmarket, while allowing Skoda to serve as a better rival to the likes of Hyundai, Kia and Dacia. This means that Seat models could be priced higher than even VW brand ones, marking the Spanish automaker as a direct competitor to FCA’s Alfa Romeo brand, something former VW chairman Ferdinand Piëch also wanted. “We want to manage our brand identities more clearly in future”, said the VW Group’s product strategy chief, Michael Jost, in an interview. “Seat could represent even more emotional cars, as exemplification by its Cupra models. Skoda could serve eastern Europe markets more intensively, as well as customers seeking functionality, even more intensively”, said Jost. Positioning Seat as a more upmarket brand actually seems easier than dialing things down for Skoda, which has proven to be a match for VW brand products in many ways; in terms of onboard tech, available options, engine range and so on. Still, VW could simply scale down premium extras in future Skoda models so as to focus more on previously neglected markets, especially in eastern Europe where Hyundai, Kia and Dacia have pushed down the Group’s market share. As for how all of this will impact the group itself, VW is apparently keeping an eye out for possible overlaps in order to make sure its own lineup doesn’t clash with other brands. “We are taking a very close look at possible overlaps in the product portfolios of all brands. We will not launch a Tiguan Coupe in the European market, for example”, added Jost. +++ 

+++ A judge has ruled that TESLA violated the National Labor Relations Act in 2017 and 2018. In a tweet published on May 21, 2018, Tesla chief executive Elon Musk suggested that employees who chose to join a union would give up company-paid stock options. This was one of a number of incidents the judge concluded were in violation of the law. “Nothing stopping Tesla team at our car plant from voting union. Could do so tomorrow if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare”, Musk tweeted. The judge order calls for the electric car manufacturer to reinstate and back-pay a fired pro-union employee, and to revoke a warning issued to another union supporter. In addition, Tesla will be required to hold a meet at its assembly plant in Fremont, California, where Musk or an agent with the labor board will be required to read a notice to employees informing them that the electric automaker broke the law. Tesla has previously denied any wrongdoing and is expected to challenge the National Labor Relations Board’s determination. The NLRB is unable to assess punitive damages or hold executives personally liable for violations and can only require companies reinstate and pay back wages to workers that were illegally fired. +++ 

+++ VOLKSWAGEN rejected a German judge’s call to settle a customer class action lawsuit over its rigging of diesel emissions tests, saying there was no case to answer. VW admitted using illegal software to cheat U.S. diesel engine tests in 2015, a scandal which has cost it more than $30 billion in vehicle refits, fines and provisions. “The vehicles are driven by hundreds of thousands of customers every day, which is why we believe there is no damage and therefore no cause for complaint”, the German carmaker said. It was responding to a call by the judge of the Higher Regional Court of Brunswick, which is near the carmaker’s headquarters, on the first day of hearings in the case. About 470,000 car owners have registered to participate in the lawsuit and the Brunswick court booked the local town hall to allow for large numbers of observers. When the diesel scandal broke 2.4 million cars with defeat devices were on German roads. In the meanwhile, 99 % have received a software update. The scandal still casts a shadow over VW, with prosecutors last week accusing its chief executive Herbert Diess of holding back market-moving information on the rigged tests. The VW board has backed Diess, who is leading the carmaker’s efforts to reinvent itself as a champion of cleaner driving. The German class action was made possible after the cabinet approved a draft law last year allowing consumer protection organizations to litigate on behalf of consumers, avoiding the high legal costs that might put people off legal action. Negotiations were unlikely to be easy but the court would want to support and not impede them, judge Michael Neef said. State-financed consumer protection organization VZBV has expressed confidence in being able to win or settle the case, pointing to the fact that a majority of local and higher regional courts have so far ruled in favor of motorists. VZBV has said it aimed to show that owners of Volkswagen, Audi, Skoda and Seat cars with so-called type EA189 diesel engines have been intentionally harmed by VW’s use of software that was used to cheat emissions tests. Volkswagen has said that there was no legal basis for consumers in Germany to seek compensation due to differences in law. Nearly all U.S. owners of affected cars agreed to take part in a $25 billion settlement in 2016 in the United States that addressed claims from them, environmental regulators, U.S. states and dealers and included buyback offers and additional compensation for about 500,000 owners. VW had rejected criticism that the compensation for U.S. car owners was not extended to other jurisdictions. Consumers have also brought lawsuits in countries including Switzerland, Austria and Belgium. The VW Group has already reached a settlement with American owners, but is vigorously defending European claims as a result of what it says are different regulations that it did not breach. To date, the scandal, which broke in 2015, has cost VW more than €35 billion in fines and costs, while it has made a provision of around €1,2 billion for defending its European cases. The law in Germany was changed to allow a group civil action against VW: previously claimants would have had to take individual action. As a result, more than 400,000 owners are said to have grouped together ahead of the new hearing, while around another 100,000 are said to be still pursuing individual action. They must prove that they were either mis-sold the car, that the technical fix approved by technical authorities has had a detrimental affect on efficiency or that resale values of affected cars have fallen. In defence, VW argues that it did not breach European law by using a device to cheat emissions tests (such was the laxity of wording of the rules) and that the effect of the cheat was to lower NOx emissions, which would have had no immediate financial impact on owners, plus the fix has been independently approved as not negatively altering any emissions criteria. In addition, it says it has compelling evidence that there has been no long-term impact on resale values. Court proceedings in Germany could take up to 4 years, according to local media reports, by which time effected cars would be at least 8 years old, and there are 3 possible outcomes: VW wins, the claimants win or an out-of-court settlement is reached if the court determines the cost of the case will exceed the likely compensation. +++

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