## Friday, January 13, 2017 ... //

### Volkswagen #1 carmaker again, Fiat-Chrysler and Renault harassed for emissions cheating

In September 2015, the U.S. Environmental Protection Agency began its holy war against the Volkswagen Group which has used a "defeat device", a clever software-hardware gadget that reduces emissions (but also efficiency of the engine) during the emissions testing, but is turned off otherwise.

This war has led to the resignation of the VW boss as well as a brutal collapse of the stocks. Look at the graphs of VOW3, the main publicly traded Volkswagen stock, what it looked like in September 2015. In the month, it collapsed from €170 to €90 or so, almost by one-half. For a year, Volkswagen also lost its yellow shirt for the #1 carmaker to Toyota.

But things are different in early 2017. Volkswagen is the world's #1 automaker again and the current price of the stock is €148, much closer to the September 2015 maximum than the minimum. VW has already paid over $17 billion to U.S. car owners – which I find insanely high but it wasn't lethal. In comparison with that, the 2-day old news that VW would pay$4.3 billion to the U.S. government looked like good news.

Among the corporate brands, the increase of Volkswagen's output was led by the 11% increase of the VW commercial vehicles, by Škoda, the traditional Czech brand, that jumped 6.8%, followed by Porsche that increased 5.6%. Porsche is ahead of Škoda when it comes to the VW brands' profitability; these two are way better than the other brands. Audi, VW proper, and Seat increased by 3.8%, 2.8%, 2.6%, respectively. Regionally, the 12% jump of the group in China helped, along with the 4% jump in Europe.

The time is changing so we learned that Fiat-Chrysler was officially told by the EPA yesterday that they were cheating on emissions. It affected Jeep Grand Cherokee and Ram trucks. Clearly, the situations are analogous. Yesterday, if you noticed, the stocks dropped in the afternoon. This new "scandal" was behind it. Fiat-Chrysler led the collapse. Today, it more or less completely recovered the losses.

On top of that, a Paris prosecutor has started to investigate Renault for its alleged emission cheating, too. That's already quite a list. October 2015, I listed Caterpiller, Renault, Volvo, Honda, and Ford as the companies that were previously caught by the EPA as cheating with the emissions.

So these things basically affect everybody and many similar scandals will probably materialize in the future.

In 2015, I found the focused witch hunt against Volkswagen to be absolutely disgusting and indefensible. I am sure I was right. Despite all the anti-Volkswagen hype, objective tests are showing that Volkswagen cars are among the cleanest ones, way better than 70% of the diesels on sale in April 2016 that didn't meet the 2017 benchmark. If there were some justice, it would be folks like Gene who would have to pay tens of billions of dollars to Volkswagen for the libel, not the other way around!

It was always my belief that all the carmakers are doing pretty much the same thing and because they produce similar diesel cars and are capable of circumventing all the tests and regulations, they must probably help themselves with similar tricks, too. I view the recent events affecting Fiat-Chrysler and Renault as vindications of this opinion of mine – that hasn't changed.

The real culprit is obviously the utterly insane overregulation of emissions and many similar things – what the carmakers have done was nothing else than sensible reactions to the insanity around that carefully evaluated risks and benefits of the responses. It's very bad that it's been politically incorrect in the EU – and Obama's U.S. – to say that the regulators are nasty scumbags who should get a proper thrashing.

So far, these random problems of random companies are bound to repeat themselves because while everyone feels that it's easy to tame the companies, no one is capable of taming the regulators.