INTERNATIONAL BUSINESS

Volkswagen to Recall 8.5 Million Vehicles in Europe

By MELISSA EDDY
00:12
01:26

German Official on Volkswagen Recall

Germany’s transportation minister, Alexander Dobrindt, said Thursday that the country would begin a recall of about 2.4 million Volkswagen vehicles at the start of 2016.
 By REUTERS on  October 15, 2015. Photo by Wolfgang Kumm/DPA, via Agence France-Presse — Getty Images. Watch in Times Video »
BERLIN — Germany’s automobile regulator on Thursday ordered Volkswagen to recall 2.4 million rigged diesel vehicles in the country, prompting the company later in the day to announce an even bigger recall — of 8.5 million of its diesel cars in Europe.
Volkswagen has been indicating for weeks that it intends to fix the cars it has admitted to deliberately equipping with software meant to cheat on emissions tests. But it wasn’t until Thursday, and only after the German government ordered a recall on the grounds that the company’s plans so far were insufficient, that the carmaker publicly committed to a program and a timetable.
Volkswagen, indicating that it would adopt the German order Europewide, said it would begin recalling and repairing the cars in January in an effort it expected would stretch beyond the end of 2016.
The company has still not said how it will fix the cars, but the German authorities have set the end of next month as a deadline for spelling out the technical details of the remedy.

Graphic: How Volkswagen Got Away With Diesel Deception 

In the United States, where Volkswagen’s deception was discovered and was disclosed by the Environmental Protection Agency in September, the E.P.A. has said it plans to order a recall — but it has not yet done so.
“E.P.A. will order a recall once the agency has done testing to confirm that Volkswagen’s proposed fix will be effective,’’ an agency spokeswoman, Laura Allen, said in an email on Thursday. “E.P.A. will conduct our own testing to confirm this. Then we will order a recall.’’
Volkswagen officials have indicated that repairing the nearly half-million cars affected in the United States might require a more extensive solution because American standards on nitrogen oxide emissions are tougher than those in the European Union.
Germany’s is the first government-ordered recall anywhere since Volkswagen admitted the deception last month. The government said it was rejecting the automaker’s previous proposal to repair the vehicles as insufficient.
Germany’s transportation minister, Alexander Dobrindt, said on Wednesday that the mandatory recall would be overseen by the country’s automobile regulator, the Federal Motor Transport Authority, known by its German initials K.B.A.
“The K.B.A. believes that the software used in the diesel engines constitutes an illegal defeat device,” Mr. Dobrindt said. “The authority has demanded that Volkswagen remove the software and take all steps necessary to ensure that the emissions regulations are met.”
Carl Tobias, a law professor at the University of Richmond, in Virginia, who has studied auto safety issues, said the K.B.A.’s recall was a positive development.
“Rather than a proposal, generated by Volkswagen and subject to what they want to do, an authority is now in charge and will dictate what happens,” Mr. Tobias said in a telephone interview.
But, “it still depends on how rigorous the authority will be with Volkswagen,” Mr. Tobias said. “V.W. has always been very cautious in terms of the timeline, and we won’t know for some time.”
The crackdown by the German government dealt a blow to the company in one of its most important markets. But Volkswagen’s stock rose in morning trading in Frankfurt, despite the recall order.
It was only after the company announced that it would expand the recall to 8.5 million cars across Europe that investors evidently absorbed the sobering scope of the automaker’s task. The shares ended the day in Germany down 3.2 percent, having lost more than a quarter of their value since the deception was disclosed on Sept. 18.
“The Federal Motor Transport Authority’s decision has created the possibility to proceed with a joint and concerted action across all of the European Union,” Matthias Müller, Volkswagen’s new chief executive, wrote in a letter on Thursday to Mr. Dobrindt.
The company’s decision to announce a broader European recall came as representatives of the K.B.A. and other national authorities were meeting in Brussels to brief the European Commission on investigations into the scandal in their markets. Austria’s Transportation Ministry said on Thursday that all Volkswagens with affected engines would be recalled in his country.
Mr. Müller said Volkswagen would provide the German regulator with a plan for the “technical implementation” of the necessary fixes by the end of November.
While vehicles with 1.2- and 2-liter engines appeared to need only replacement software to bring them back into compliance, the 1.6-liter models would most likely require additional hardware to remedy the problem, and such hardware would not be ready until next September, Mr. Dobrindt said.
But he expressed confidence that Volkswagen would be able to meet the authority’s demands. “We have the impression that Volkswagen is technically capable of carrying out the technically necessary measures,” Mr. Dobrindt said.
Volkswagen said on Thursday that it would directly contact and inform customers who have vehicles with an affected engine, pointing to a websiteset up this month where customers could enter a vehicle’s identification number to check whether it would be part of the recall.
Volkswagen holds near mythical status in the world of German business and is deeply entwined with the emotions of post-World War II recovery.
The company is governed through a unique structure, involving a hybrid of control by members of the Porsche and Piëch families, the state government of Lower Saxony and labor representatives.
In the past, Volkswagen has been dominated by strong personalities with a top-down style of decision-making that some critics have said may have contributed to mistakes that led to the scandal.
At a meeting with top managers in Leipzig on Thursday, Mr. Müller signaled a break with that style of management, saying that future decision-making would be less centralized and that Volkswagen’s divisional managers would have more autonomy.
“Volkswagen is not a one-man show,” Mr. Müller said in an address.
“It is definitely not my intention to intervene in decisions about products,” Mr. Müller said, in what appeared to be a clear break with the obsession of his predecessor, Martin Winterkorn, to be involved in the minutest details of product development. “Whether a windshield sits at a one-degree angle higher or not, I’m not going to concern myself with that.”
This week, Volkswagen said it would develop electric vehicles, an offering the company has been slow to adopt, despite a pledge by the German government to get a million electric cars on the road by 2020.
Barbara Hendricks, the German minister for the environment, said in comments to ZDF public television early Thursday that the government should consider scrapping tax subsidies for diesel, shifting them instead to electric vehicles to encourage more environmentally friendly technology.
But she later backtracked, issuing a statement in which she warned against “demonizing” diesel technology, a warning that was also sounded by Mr. Dobrindt. According to a study by Roland Berger consultants, more than 50 percent of all new passenger cars sold in Europe run on diesel, which is favored for its fuel economy, despite its higher emission of pollutants.
Jad Mouawad contributed reporting from New York.