Volkswagen to Stop Sales of Diesel Cars in U.S.

Martin Winterkorn, the chief executive of Volkswagen, speaking before the start of the International Motor Show in Frankfurt. (PHOTO CREDIT: Odd Andersen/Agence France-Presse — Getty Images)
Martin Winterkorn, the chief executive of Volkswagen, speaking before the start of the International Motor Show in Frankfurt. (PHOTO CREDIT: Odd Andersen/Agence France-Presse — Getty Images)

Volkswagen said on Sunday that it would halt sales of cars in the United States equipped with the kind of diesel motors that had led regulators to accuse the German company of illegally installing software to evade standards for reducing smog.

John Schilling, a Volkswagen spokesman, said that the company would stop selling 2015 and 2016 Volkswagen and Audi models equipped with 4-cylinder turbo diesel engines, which the company has marketed as “clean diesel.” The company will also stop selling used cars that have the engines, Mr. Schilling said.

He said he did not know how many models would be stuck on dealer lots as a result of the decision. Earlier this month, Volkswagen had said that 23 percent of new cars sold in August were diesels, or 7,400 vehicles.

The confirmation of the halt in sales came on the same day that Martin Winterkorn, the chief executive of Volkswagen, apologized for conduct that prompted the Environmental Protection Agency to order Volkswagen to recall nearly half a million vehicles.

Volkswagen could face billions of dollars in fines for what the E.P.A. said was a deliberate attempt to evade rules on emissions. The decision to stop sales was first reported by The Wall Street Journal.

“I personally am deeply sorry that we have broken the trust of our customers and the public,” Mr. Winterkorn said in a statement.

He said the company would “cooperate fully” with the authorities and order its own independent investigation into the accusations.

In his statement, Mr. Winterkorn did not contest assertions by the E.P.A. that Volkswagen sold cars equipped with software that could detect when periodic state government emissions testing was taking place.

Only during such tests are the cars’ full emissions control systems turned on. During normal driving situations, the controls were turned off, allowing the cars to spew as much as 40 times the pollution allowed under the Clean Air Act, the E.P.A. said.

Diesel-driven cars have enjoyed something of a renaissance in recent years, shedding much of their old stigma for being dirty, clanky and sluggish to drive, said Karl Brauer, an analyst at Kelley Blue Book. And in the United States, he said, Volkswagen has clearly led the pack — offering diesel vehicles that performed just like their gasoline counterparts.

“Now, we have to wonder if the technology really advanced as far as we thought at VW,” Mr. Brauer said. “They must have had a problem making it work in a way that delivered truly clean diesel. At least clean enough to meet the regulations.”

Mr. Brauer said the higher nitrous oxide emissions probably meant better drivability. Fuel economy also improves with more nitrous emissions, and engines can run cooler, and thus wear out more slowly.

“They must have had a mix of performance, economy and durability that they liked, but realized they couldn’t achieve that and still get the emissions,” he said.

Diesels in particular are known — and marketed — these days as having tremendous torque, or low-end thrust from a stop. If achieving the required emissions affected the torque, making it anemic, then “drivers are going to scratch their heads, thinking, isn’t this why I got a diesel?” Mr. Brauer said.

Volkswagen was going through a difficult period even before the accusations became public on Friday. Mr. Winterkorn recently survived a power struggle with the chairman of Volkswagen’s supervisory board, Ferdinand Piëch, a scion of the Porsche family who dominated the company for more than two decades before resigning in April.

Following Mr. Piëch’s departure, some analysts have raised questions about whether Mr. Winterkorn would be strong enough to hold together the sprawling Volkswagen empire, which also includes Audi and Bentley luxury cars, Porsche and Lamborghini sports cars, Scania and MAN heavy trucks, and Ducati motorcycles.

Although Volkswagen recently surpassed Toyota as the world’s biggest automaker measured by the number of cars sold, it is significantly less profitable than its Japanese rival and far weaker in the United States market.

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SOURCE: NY Times, Jack Ewing and Coral Davenport