 "Deflated by a chip")
The Volkswagen factory at Wolfsburg near Berlin was the first car factory I saw in 1980 before I became an automobile writer. Even back then it was almost fully automated, producing a car every two minutes.
It was amazing to see its flexible manufacturing system where one assembly line could be building several different cars with different body shells, engines, colours, music systems and seat covers. The master computer would send out every customer's specific choices to a huge number of sub-assembly stations that would then deliver them sequentially to the main assembly line. An army of robots, like giant red insects, seemed to be doing all the work and the few human beings would spring to life only if an alarm indicated some malfunction. The line could not stop and the workers would rush to fix the problem or put a magnetic marker showing the difficulty that was later fixed in the rework section at the end of the line. It was interesting to learn that automobile technology was not only about cars but also about production.
Building a poor man's car had been the Holy Grail for several automotive companies. Apart from the Volkswagen Beetle, there was the older Fiat 500, the British Mini and the French Citroën 2CV. After World War II, Japan also promoted a few small, very basic cars and one of these was to evolve into the Maruti 800 that revolutionised Indian roads.
I first drove a battered Volkswagen Beetle in 1957 when it was being repaired at a workshop next to where I was trying to restore an old 500cc Jawa 4-stroke motorcycle that I had found junked in Old Delhi. It felt a bit strange driving with a rear engine car, but I found the ride and handling very good and the inner space and comfort amazing. The small boot in front of the passenger compartment was inadequate. It was, however, strongly built and the owner loved it as is the case with most Beetle owners.
In 1959, I went to France to study and fell in love with another strange car that too had once sold in millions. This was the Citroën 2CV that had a compact engine and gearbox in front. I later drove one from Mumbai to Delhi in the monsoons and so fell in love with it that I persuaded Escorts in 1983 to try and make it in India. The Indian government would not approve it as it felt this might affect the Maruti project.
Volkswagen was born before World War II, in 1937, and its first car was a very basic one, designed to be cheap to make and cheap to run. It had a small air-cooled engine in the rear close to the transmission for reducing the fuel consumption and increasing space in the passenger compartment.
It evolved in a number of models to ultimately become the famous Beetle that became one of the most popular cars in the world. Up to 1972, 15 million units were produced at Wolfsburg until new safety and emission norms made it necessary to shut it down. It continued to be made in Mexico till 2003 by which time it had a record production of 21.5 million units. Though Volkswagen also made many other successful cars, demand for the iconic brand resulted in a modern new Beetle, but it was not a great success. In 2014, Volkswagen was neck and neck with Toyota as the largest automaker with a global production of over 10 million cars and commercial vehicles.
Despite a formidable pedigree, Volkswagen got off to a slow and shaky start in India. For many years it dismissed India as being an unsuitable production centre until it saw that several international brands, including its own fully owned subsidiary, Skoda, were doing very well here. Then in 2005, one of its senior representatives got into an ugly bribery scandal in Andhra Pradesh, so Volkswagen ended up as being the last major car company to set up shop in India. In 2007, it began production and today, it has a big plant at Chakan near Pune and investments of Rs 4,000 crore to make 200,000 units per year.
The Polo hatchback is its most popular model, but it also makes the Vento, Jetta and the Passat Saloon. In 2014-15, Volkswagen sold 42,827 units making it India's ninth largest automaker. Volkswagen also markets several imported models like the Touareg SUV, the new Beetle and the luxury Phaeton Saloon, but these imports are not very popular. Despite its great reputation, competitors led by Maruti-Suzuki and including Hyundai, Toyota, Honda, Tata, Ford and General Motors have done much better. In a highly competitive market, customers want the best car their money can buy and the magic of the great Volkswagen name has become a bit tarnished.
In the last two decades, automobile technology has steadily moved from mechanical engineering to electronics. Even small cars have over a dozen microprocessors and chips to control almost every function like engine management, suspension, braking, steering, climate and lighting. These are essential for the constantly increasing demands of safety, fuel efficiency and pollution control. Modern cars now have more chips in them than wafers in a packet. The most important component is probably the electronic control unit that calibrates the fuel supply to meet every road and load condition with sensors to measure the temperature, oxygen levels, speed and every other parameter.
Volkswagen, however, took its technology a bit too far. Since 2009, it has been introducing a secret code into its diesel vehicle software to track the steering and pedal movements when these indicated that the car was being tested for nitrogen oxide emissions and the car would automatically turn its pollution controls on. The rest of the time, the pollution controls were off. The regulators had no way of knowing about this technical ruse. The problem was discovered by the International Council on Clean Transportation, which wanted to investigate why there was such a huge discrepancy between laboratory tests and real-road performance of several of Volkswagen's diesel cars. Investigators stuck a probe up the exhaust pipe of some Volkswagen's clean diesel cars and drove them from San Diego to Seattle and found that the Jetta and Passat were emitting many times as much nitrogen oxide as was found in lab tests.
In May 2014, California's air pollution regulator and the Environmental Protection Agency ordered Volkswagen to fix the problem, but the road performance still didn't match lab tests. Volkswagen finally cracked and admitted to the existence of these pollution defeat devices, which had been carefully hidden in its software codes. Volkswagen admitted that some 11 million clean diesel vehicles were affected. The models expected to be recalled and rectified include the 2009-2015 VW Beetle 2.0L TDI, 2009-2015 VW Golf 2.0L TDI, 2009-2015 VW Jetta 2.0L TDI, 2009-2015 Audi A3 2.0L TDI and 2014-2015 VW Passat 2.0L TDI. This has been the biggest ever scandal of the global automobile industry and it will cost the company a fortune in recalls and fines. It took generations to build the great Volkswagen reputation and one little chip was to completely deflate a great company.
When the scandal broke on September 23, Martin Winterkorn, the CEO of Volkswagen AG who has since resigned, said, "I am shocked by the events of the past few days. I am stunned that misconduct on such a scale was possible in the Volkswagen group. As CEO I accept responsibility for the irregularities. I am doing this in the interests of the company, even though I am not aware of any wrongdoing on my part."
Everyone loves a good disaster and there are now reports that Hollywood is planning to make a film on this corporate disaster.
