Automakers need to be eco-responsible

It is a tough time for major automakers hit hard by scandals over concealing faults that cause pollution. These revelations have a negative impact on investors and consumers as executives try to contain mistrust through redressing these technical errors, but at a huge price.
Volkswagen’s admission in September that it had illegally fitted special devices in 11 million diesel cars, allowing them to pass pollution tests, was a moment of illumination that something has gone wrong not only with VW, but also with other auto companies.
This has also brought public decision makers and regulators under scrutiny. “European governments are turning a blind eye to over-polluting cars,” an NGO report said on Monday, nine months after the VW expose. Anti-air pollution lobby Transport & Environment released its scathing report before the EU’s 28 transport ministers meet in Luxembourg to discuss the fallout from the Volkswagen crisis.
Such scandals hit the firms hard. Incalculable costs of the emissions test cheating scandal at VW pushed the company into the red for the first time in more than 20 years. The California State Teachers’ Retirement System claimed on Tuesday that VW misled investors about emissions, seeking damages that could reach as high as 700 million euros ($790 million) if other investors agree to join the action.
Another 278 institutional investors sued in March, seeking 3.3 billion euros in a lawsuit over the timing of market disclosures. Volkswagen has so far set aside 16.2 billion euros for the scandal, including repairs, legal costs and fines.
But it says the investigation announced this week doesn’t involve new facts or revelations. The automaker also argues the suits are without merit, and that the company informed investors properly based on the information available at the time.
The market also reacted to the scandal. Volkswagen shares have declined 23 percent since the scandal broke in September, shaving about 12 billion euros off the company’s value. The stock was 1 percent higher at 124.30 euros as of 10:55 a.m. on Thursday in Frankfurt trading.
Due to the VW scandal, other automakers were also subjected to tests. Subsequent tests on European brands under real-driving conditions found pollution levels much higher than those turned up by national regulators in laboratories, indicating possible wrong-doing.
Brussels-based T&E stepped in urging governments to act on the evidence, citing that ongoing probes in France and Germany fell short.
It specifically accused national regulators of ignoring evidence of over-pollution to protect their domestic industry. “Carmakers are choosing to play at home with a biased referee, guaranteeing that they win but their cars pollute and people die,” said Greg Archer, director of clean vehicles at T&E.
Germany in April said that 16 major car brands — ranging from France’s Renault to Italy’s Fiat to Japan’s Nissan — showed up irregularities in their tests. Its regulators suspect that Italian-American auto maker Fiat Chrysler, like Volkswagen, used illegal software to cheat on emissions tests, a newspaper report said on Sunday.
While Suzuki admitted to finding “discrepancies” in its fuel-economy and emissions testing, but the firm denied deliberately manipulating data to make cars seem more efficient. The revelation follows rival Mitsubishi Motors’ shock admission last month that it had cheated on fuel-efficiency tests for decades.
The scandals have a global nature and raise questions about other minor automakers. It is high time that automakers shape up and rethink about their social responsibility. They should be transparent and opt for clean technologies. If they don’t, a public backlash is imminent.