Narrator: Volkswagen had a reputation as one of the most reliable car manufacturers on the planet.
But in September 2015, that reputation was shattered.
Michael Horn: So let's be clear about this,
our company was dishonest.
Narrator: Welcome to 'WatchMojo News',
the weekly news series where we break down news stories that might be on your radar.
In this installment, we're counting down ten crucial facts you should know...
...about the Volkswagen scandal.
The modern automobile industry is subject to extensive emissions testing...
...with an increasing necessity to inflict as little damage onto the environment as possible.
However, it's been revealed that between the years 2008 and 2015,
leading German manufacturer, Volkswagen, has been cheating on US air pollution tests,
by purposely altering car performance during testing and providing falsely favourable results.
VW emissions consistently met with standards during official test conditions,
but for everyday road use, their output has been measured at 10 to 40 times the legal amount.
The scandal mostly centers on VW's diesel range,
which had previously been extensively advertised as quote "clean".
Diesel, which the company's 2015 ad campaigns claim is reputedly a quote "dirty word",
has historically proven difficult to convert, based on modern day environmental standards.
Experts say that pollution-define cleaning technology may have adverse effects on the car's performance...
...speed and fuel efficiency.
A negative impact that manufactures are looking to avoid,
it seems that VW got around the potential problems by being dishonest.
The deception was achieved by the company's installation of 'defeat device software'...
...in over 10 million cars worldwide.
It isn't a physical piece of equipment identifiable under the hood,
but equates to extra lines of software incorporated into the vehicles pre-existing computer controls.
The extra technology enables a car to identify when it's being put under laboratory test conditions,
based on, quote, "the position of the steering wheel, vehicle speed, the duration of the engines operation...
...and barometric pressure", according the the Environmental Protection Agency.
Once test conditions have been identified, the car alters its performance...
...so that emissions are lower than they otherwise would be.
Michael Horn: Our company was dishonest... and in my German words: "We have totally screwed up!"
John Oliver: Yeah, but "totally screwed up" are not German words.
Narrator: Volkswagen was initially exposed in 2013,
following independent testing carried out by the International Council on Clean Transportation (ICCT).
The ICCT had originally been testing to prove VW as a leading example...
...of how diesel could be a clean fuel
Representative John German later said, quote, "We had no cause for suspicion,
We thought the vehicles would be clean."
Lab and road tests were carried out on a BMW X5 SUV, a 2012 VW Jetta and a 2013 VW Passat.
The BMW passed both, but the VW's failed the road tests significantly,
with the Passat exceeding nitrous oxide caps by up to 20 times...
...and the Jetta by up to 35 times.
The matter was then passed over to the California Air Resources Board...
...and the Environmental Protection Agency (EPA), who scrutinised further...
...until, eventually, the truth was unearthed in 2015.
These developments have no implications in terms of VW's safety,
however, VW drivers and the international community in general,
have been left reeling from this blatant display of deception.
Some estimates say that up to one million extra tons of air pollution...
...have been slyly channeled into the atmosphere by VW,
while further investigations have gradually discovered previously "hidden" air pollutants...
...present in and around major cities.
Many critics have suggested that VW values company profit over its impact...
...on the international environmental, not to mention customer health and wellbeing.
Rather than accept climate change and adapt to it,
they sought new, until now, unidentifiable ways of getting around it
VW finally admitted to the 'defeat device scheme' in early September 2015,
after extensive pressure from the EPA.
The scandal, which has been criticized as, quote, "illegal and a threat to public health",
was then made public on September 18th, 2015, prompting a massive reshuffle within VW itself.
CEO Martin Winterkorn, initially issued an apology, but eventually resigned from his position,
saying, quote, "I am clearing the way for a fresh start with my resignation."
and that fresh start is likely to suffer severe financial strain.
On September 21st, 2015, VW stock plunged more than 20%,
and it was estimated then, that the scandal could cost the company nearly $20 billion.
Incoming CEO, Matthias Müller, however, promised, quote, to "leave no stone unturned"...
...in rebuilding the company into one that maintains, quote, "maximum transparency".
The initial expectation was that affected cars would be recalled,
in order to update software and remove the defeat device.
The owners that were most likely be directly affected, were those that were equipped...
with the EA189 2.0 litre TDI engine.
However, as of the end of September, 2015, it was still not determined whether or not...
...there would be worldwide recall.
At that point in time, it had not yet been confirmed that any vehicle had duped EU standards,
and so the situation in Europe remained largely unchanged.
That being said, on September 25th, 2015, Switzerland had temporary banned the sale...
...of Volkswagen diesel engine models.
If and when a vehicle is recalled, however, there could be grounds for a compensation claim,
should the car depreciate in price and/or performance as a result of the changes.
As of the end of September 2015, around 500,000 vehicles were affected in the US,
and around 11 million worldwide.
In terms of specific models, the VW Jetta, Passat, Beetle and Golf could all carry the defeat device software...
...if built in, or after 2008.
The Audi A3 is also implicated, as Audi is a subsidiary of the Volkswagen Group.
Some commentators warned that the scandal could signal a snowball effect...
...throughout VW in general, however, and could go on to affect car manufacturers...
...that are linked to them as well.
As of the end of September 2015, it was unlikely that the deceptive VW engines would be easily fixed.
Not only would it require a massive logistical effort to recall and reshape the software,
the company would also have had to develop an engine that is actually compatible...
...with environmental standards.
The Consumer Reports' director of automotive testing, Jake Fisher, summarized the VW problem,
quote, "Building an engine involves balancing four factors — performance, emissions, durability,
and fuel economy," he explained.
VW had sacrificed the emissions part of that balanced in order to deliver high spec engine...
...in terms of the other three factors
For Fisher, quote, "whatever the fix is, it will likely sacrifice fuel economy and probably durability as well,"
meaning that the previously first class VW performance could now falter beneath its rivals.
Economically, experts predicted at the end of September 2015, that the VW long game...
...would not suffer too badly, due to the clean diesel scandal.
The company has in place an admirable financial structure that should be able...
...to weather any initial fines and cost, even if they do escalate into the tens of billions of dollars.
However, marketing strategists and product engineers in general surely had their work cut out...
...to restore customer faith.
Driver: I can't drive like a... a car that like grew insane environment.
Narrator: Not only did the cars themselves have to be redeveloped,
In order to deliver the same high standard of performance without skimping...
...on environmental standards, but the general public also had to be made...
...to believe in the brand once again.
VW has long prided itself a class above its competitors,
but with these failed tests, it is fallen way down in the eyes of the public.
Did these fact get you thinking?
To vote for which news story is covered next, head over to watchmojo.com/suggest
and be sure to hit that 'Subscribe' button for more newsworthy Top 10's published every week.