Behind The Volkswagen Scandal, A “Car Cold War” Simmers

The still-unfolding Volkswagen diesel emissions scandal has earned the largest German automaker more than a week of public opprobrium in the US media, as American owners, regulators and commentators rush to condemn the most blatant case of regulatory evasion in recent automotive history. In Europe, however, the outrage at VW’s emissions manipulation is tempered by a certain amount of realpolitik. French Economy Minister Emmanuel Macron has given voice to European suspicions by suggesting that American automakers are fueling the scandal for competitive purposes, and German officials have made it clear that they intend to “contain” the scandal. Grievances over auto industry issues have long been a source of friction between President Obama and German Chancellor Angela Merkel, and the Volkswagen scandal has brought tensions old and new spilling out into the open.

 

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World War Car: Send In The Hedge Funds

Masters of the Universe tend to leave a lot of fingerprints...

Masters of the Universe tend to leave a lot of fingerprints…

As information technology made global markets a reality in the 1990s, a wave of thought espousing a liberal-democratic “end of history” became widely popular. Thanks to markets and democracy, it was believed, the patterns of the preceding centuries would be replaced with a new global peace, maintained by transnational business bonds whose mutual benefits would prevent democracies from pursuing antagonistic agendas. In certain ways, the theory has proven more than mere wishful thinking: one can imagine far more friction occurring between China and the US, were these two largest economies in the world not woven so tightly together. And yet, in the auto industry, where the line between free market multinational and “national champion” has often been a thin one, the subtext of geostrategic competition seems to be seeping through more and more of the news.

Bertel’s report on the lawsuit against Ferdinand Piëch and Wolfgang Porsche is a prime example of the suspicion, if nothing else, that the US government’s involvement in the auto industry has aroused. Naturally Der Spiegel, the original reporter on the lawsuit, didn’t assert the involvement of the NSA… but in the post-Snowden and post-bailout world, German commentators can’t help but wonder where Singer’s information comes from. Basic logic suggests precisely what can not be reported: How do you know that Piech and Porsche used hardened cell-phones and unbreakable codes, if you haven’t tried breaking in? Though a vocal proponent of free markets, Singer is no longer living in the 1990s; thanks to an arms race in government support for auto industries, his lawsuit’s implication of secret information about Germany’s national champion automaker forces it into the wider context of  US “geonomic” tactics that appears to  include sending Goldman Sachs into Libya instead of the Marines.

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Hedge fund sues Ferdinand Piëch and Wolfgang Porsche, using what some say is NSA information

Ferdl and Wolferl

Ferdl and Wolferl

Elliott Associates, one of the world’s oldest, and definitively the world’s most aggressive hedge funds, brought suit against Volkswagen Chairman Ferdinand Piëch and his cousin Wolfgang Porsche. The suit alleges, as Der Spiegel reports, that both conspired in the takeover of Porsche by Volkswagen, and that they defrauded shareholders. The suit asks for punitive damages of €1.8 billion ($2.43 billion.) This is not the first lawsuit in that matter, there are pending lawsuits against Volkswagen and Porsche, asking for a total of €5.7 billion. This is the first suit against Piëch and Porsche in person. It marks a “new level of escalation,” as Der Spiegel says. Escalation also, because some say the NSA is an informant.
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GM third-largest automaker in 2013 global sales

Wolfsburg skies

Da raucht der Schlot

We have warned repeatedly not to jump to conclusions, and not to crown GM the world’s second-largest automaker (behind Toyota), based on 2013 sales, and that “whoever tells you that GM is second and VW third should apply for immediate amateur status.”  We still have a few contacts in Wolfsburg, and we prepared you for a surprise.  The surprise (not for us) came today. Reuters reports that “Germany’s Volkswagen narrowly beat General Motors Co. in the global auto sales race last year, finishing as runner-up behind sales champion Toyota Motor Corp.” [Continue Reading]

Volkswagen sells 9.7 million units in 2013 – GM’s #2 rank endangered

Wolfsburg skies

Wolfsburg skies

Volkswagen said today that it „delivered over 9.7 million vehicles to customers last year.” It did so with a little numbers-engineering, namely by counting the sales of its MAN and Scania brands, which it had not done before. That move however was widely expected, and frankly, many people asked why it wasn’t done earlier. Volkswagen is in firm possession of both companies, and if GM can count 1.5 million Wuling vans, made by a joint venture where GM is a minority shareholder, then Volkswagen has all the rights to count all trucks and buses made by companies where VW owns more than 75 percent of the shares. [Continue Reading]

October car sales up 2.3 percent in Germany

Ger October

New car registrations in Germany, Europe’s largest car market, rose 2.3 percent in October, Germany’s Kraftfahrtbundesamt says. [Continue Reading]

Optimistic Musk sees 10,000 Teslas per year in Germany. Let’s look a little closer

Musk in Germany - Picture courtesy siliconbeat.com

Beginning in 2015, Tesla wants to “sell some 10,000 cars per year” in Germany, Elon Musk told Germany’s Welt. And they will be powered by sunlight. “By end of March 2014, half of Germany will be covered by Superchargers,” Musk promised. “By the end of 2014, the whole country will be covered. That’s 40 to 50 stations.”

The stations will be powered by solar panels. “A Tesla driver should need no more than sunlight,” Musk told the paper. He is a very optimistic man.

Germany is a 3 million unit car market, give or take a few. 10,000 Teslas would mean a market share of 0.3 percent. To assist Tesla in its projections, here some data on the German car market. [Continue Reading]

MQB: Run-away costs instead of outrageous savings?

mqbchart

The European auto scene is abuzz, what am I saying, it is ablaze with the news that Volkswagen might miss its profit targets set for 2015. If that happens, the 8 percent EBIT, targeted as part of the Strategie 2018, also will remain a dream, Volkswagen’s CFO Hans Dieter Poetsch warned. This according to a report of the usually well informed Manager Magazin. VW has been raking it in in the past years, while most of its EU peers went hungry. Parts of VW’s pornographic profits were fueled by realized gains from stocks and options amassed during the Porsche-takeover, but a good deal of the money was made the old fashioned way, with cars. [Continue Reading]