VW launches new UK diesel scrappage scheme

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Volkswagen UK is offering customers discounts of up to £6,000 to trade in diesel vehicles when buying a new car.

All the Volkswagen UK brands – including Audi, Seat, Skoda and Volkswagen Commercial Vehicles – will participate. VW launched a more generous scheme in Germany in August in the wake of its diesel emissions scandal. Competitors in the UK, including BMW, Ford, Hyundai, Mercedes-Benz and Vauxhall have already launched schemes.

Rival Toyota also launched a scrappage scheme on Friday, offering up to £4,000 off a new Toyota. VW’s UK scheme is a continuation of the initiative launched in Germany, which was brought in after a top level summit between politicians and the country’s leading carmakers, including BMW, Daimler and Opel.

VW’s German scheme offered a discount of up to 10,000 euros (£9,000) to trade in diesel vehicles Diesel cars have been under scrutiny over high levels of nitrogen oxide emissions, sparked by VW’s diesel scandal. Two years ago it was revealed that Volkswagen had cheated emissions tests, affecting 11 million vehicles worldwide. Car manufacturers have been under increasing political pressure, especially in Germany, to encourage consumers to buy less polluting cars.

UK trade-ins

VW’s UK scheme will apply to any diesel vehicle that has emissions standards lower than Euro 5 and was registered before 2010. Incentives range from £1,800 off a new VW Up! to £6,000 off a Sharan people carrier. Electric and hybrid vehicles, which attract government grants, will be included in the scheme. So, for example, an e-Golf, which gets a £4,500 grant from the government, will also have VW trade-in saving of £5,500, adding up to £10,000 off in total.

Tim Urquhart, principal analyst at IHS Automotive, said the move was both about restoring VW’s credibility after “Dieselgate” and boosting sales. “We’ve seen a bit of a drop in the UK car market this year after years of really accelerated growth. I think the manufacturers are looking to get people into their showrooms,” he told the BBC’s Today programme. “At the same time VW are showing they are being socially responsible. They are getting some of these older diesel vehicles off the roads.”

Positive publicity

Jim Holder, editorial director of Haymarket Automotive, told the BBC that VW’s scrappage incentives would vary from country to country, due to factors such as transport costs and vehicles being cheaper in its home market. However, he said VW would probably have pitched their discounts in order to compete with rival schemes in the UK market. VW’s UK scheme offers substantially higher discounts than some of its competitors, which seem to hover around the £2,000 mark as an upper limit. However, Mr Holder added that it was not clear what impact the VW scheme would have on vehicle sales. “Owners of older vehicles typically don’t have the money to spend on a new vehicle, even with these discounts – in normal circumstances it would be far more likely that they would trade up to another, less old, used car. “However, there are some potentially good savings here, and the positive publicity could stir interest at a time when registrations are down across the market,” he said.

‘Win-win solution’

Toyota’s scheme runs from 1 September to 31 December and is open to any vehicle more than seven years old. Customers can get a discount of £2,000 off models including Aygo, Prius and Hilux, and £4,000 off a Land Cruiser. Paul Van der Burgh, Toyota GB managing director, said: “Our scrappage scheme is a win-win solution. Motorists can dispose of their older vehicles and have access to our cleaner, more efficient model range.”


Former VW boss investigated over emissions fraud

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The former boss of VW may have known the car-maker was cheating on emissions tests earlier than he admitted, German prosecutors have said.

Martin Winterkorn quit in September 2015 after VW admitted to using software to lower the emissions from its diesel vehicles during tests. He has since denied knowing of the violations until late in August 2015, shortly before the board reported them. But German authorities said they were now investigating him for fraud.

Prosecutors from the German region of Braunschweig said they had searched 28 homes and offices this week in connection with the scandal. As a result, the number of people accused of misconduct had risen from 21 to 37, including Mr Winterkorn. “Sufficient indications have resulted from the investigation, particularly the questioning of witnesses and suspects as well as the analysis of seized data, that the accused [Mr Winterkorn] may have known about the manipulating software and its effects sooner than he has said publicly,” the prosecutors said in a statement.

Earlier this month, VW admitted to US prosecutors that about 40 employees had deleted thousands of documents in an effort to hide systematic emissions cheating from regulators. It was also fined $4.3bn by US authorities and agreed to plead guilty to criminal charges. In addition, the car-maker has agreed to a $15bn civil settlement with environmental authorities and car owners in the US. It is also facing 8.8bn euros ($9.41bn) in damage claims following the collapse of VW’s share price after the scandal broke. VW shares slumped by a third in the immediate aftermath of the scandal and are still 7% below their September 2015 level.


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