CAP has said it does not expect the ongoing VW emissions scandal, which yesterday included an admission of corporate errors and misconduct, to impact on residual values.
The chairman of the German carmaker yesterday said a corporate culture that tolerated rule-breaking was at the heart to the scandal. Speaking at VW’s Wolfsburg HQ, Hans Dieter Potsch said nine staff had been suspended and that the attempt to cheat testing in the US was the result of the EA 189 engine not being able to meet stringent environmental controls.
‘We are talking here not about a one-off mistake but a chain of errors,’ he said. It was also announced that owners of affected cars in both Europe and America would be compensated.
However, in response to the Volkswagen statement, Dylan Setterfield, senior forecasting editor at CAP said: ‘To date, Volkswagen prices have only moved in line with the overall market. We had expected some level of short-term impact due to the adverse media coverage, but this has not materialised.
‘We are studying used car sales data, and wider metrics, such as the proportion of cars available for sale, and unsold volumes. None of these show any impact, and dealers tell us consumer interest has remained in line with previous years.
‘We have said all along that we do not expect there to be any impact on future residual values as a result of the USA NOx testing scandal. The fundamental attributes of the vehicles on UK roads are unchanged, and there is no performance, environmental, tax or economic implication.
‘Previously, we had expressed a view that some impact was expected from the ‘potential irregularities’ in European CO2 data. However, following the latest data release on 11 December, the number of affected vehicles is dramatically fewer than originally advised, and also the eventual CO2 (and therefore MPG) changes are now expected to be minimal. On this basis, there will be little or no impact on future values.’
In response to the reporting of compensation for reduced values, Setterfield said: ‘We do not expect to see any reduction in values, and even if there were to be such a reduction, it would be very difficult to establish how much of any price fall was attributable to the emissions scandal.
‘From a consumer perspective, there seems to be anecdotal evidence to suggest motorists are reluctant to have the remedial work done, amidst unjustified concerns around performance. This potentially gives rise to increased variation in future values – a car which has not been ‘remodelled’ could bring higher proceeds if sold privately, but attract a lower part exchange value if trading with a franchised dealer.
‘These will probably be impossible to distinguish between in the used car trade and retail sales data.’
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