Volkswagen scandal has lessons for India too
In the scale of cheating scandals, the latest one involving the German carmaker Volkswagen and the United States Environmental Protection Agency must rank as one of the most epic corporate cheating scandals of all time. This is no ordinary cheating scandal, which usually involve banks and trading houses and the odd rogue trader or three. This involves one of Germany’s most powerful and influential companies, a bulwark of Germany’s post-World War II industrial prowess. However, the way the scam was conducted was a sign of the times, it required some fairly advanced sensors and computer code to ensure that cars equipped with Volkswagen Group’s diesel engines — in this case a popular two-litre turbodiesel engine — could pass the Nitorogen Oxide emission tests, and once off the testing rig, revert to normal and what is now being referred to as ‘polluting’ mode. The cheat itself was a marvel of software engineering. Thankfully, Volkswagen’s India software development centre opened only in 2014, too late to have played an active role in this scandal.
Diesel engine cars have until recently been thought to be far worse to drive than petrol engine cars. This is because diesel is a heavier fraction of crude oil and diesel engines are heavier, noisier and tend to vibrate more than petrol engines. That said, diesel engines are certainly more economical over long distances, and have a lot more turning power — torque — than petrol engines, which is why it is the fuel of choice for freight and public transport. At the same time, petrol by being a lighter fuel also burns a lot cleaner than diesel, thus producing more pollutants particularly Nitrous Oxides (NOx) than petrol cars. The way the cheat worked was by letting the Nitrogen Oxide trap in the car work differently when the car was being tested for emissions and when it was being driven. This is due to the demand for ‘drivability’ among car owners who want their cars to be fun to drive. And in that regard tremendous progress has been made in diesel technology over the past few years which, we have been told, is because diesel engines have more power, run more smoothly, and crucially have become cleaner. The proof of the pudding was in the incredibly low emissions emitted by these engines that passed the USEPA’s extremely stringent pollution norms, particularly for NOx. The problem is that to pass these tests the car would need to consume more fuel as well as suffer a power deficit, making these diesel engines non-competitive versus petrol cars.
To pull off a scam of this magnitude, a scam that involves 11 million cars produced and sold globally over five years, would involve the company’s top management. It is no surprise that Mr Martin Winterkorn, the chief executive of the German carmaker has resigned. This scam should also bring into focus the lackadaisical attitude of Indian authorities towards emissions and pollution. Cars equipped with the engine in question were sold in India by Volkswagen and sister-companies Audi and Skoda. While the USEPA norms are far stricter than norms in India, the fact that this scam has set off worldwide turmoil should make the authorities in India realise that strict action should be taken on this front.