Cantillon: VW may not be the only cheats in the car showroom

As many predicted, it seems the Volkswagen emissions scandal may not be an isolated incident. On Friday French prosecutors announced they are investigating Renault over suspected "cheating" in emissions tests. Prosecutors said that French experts found high levels of potentially harmful Nitrogen oxide (NOx) from several carmakers, including Renault.

On Thursday the US Environmental Protection Agency charged Fiat Chrysler with having hidden software installed on more than 100,000 Jeep Grand Cherokee and Dodge Ram vehicles in the US.

Last year Germany's transport ministry complained to the European Commission after it claimed Fiat was stonewalling its investigation into allegations that some models were also equipped with software designed to mislead official test procedures.

Earlier this week in the US Volkswagen pleaded guilty to three charges related to defeat devices it fitted to 11 million cars worldwide. The German car giant will pay $4.3 million in fines. However, the guilty plea doesn’t stop the criminal pursuit of individual executives for their involvement. The US justice department already charged six Volkswagen executives deemed responsible for the conspiracy. More arrests cannot be ruled out. Meanwhile, consumers and investors are also pursuing civil actions against the firm, which has already paid out over $20 billion to date on the back of the scandal.

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Misleading test results

At the heart of these allegations is that software is being used to identify when a car is undergoing an official test. It then maximises the vehicle’s efforts to lower emissions, throwing up misleading test results. Back on the road the figures are very different. In VW’s case the NOx emissions were 40 times greater than when tested.

Whatever the outcome of the latest investigations, there are already clear lessons to be learned. First, the current test regime isn't fit for purpose and proposed changes need to take account of the potential for software programmes to influence test results. Secondly, Europe needs to pay more attention to NOx emissions. While US regulators imposed strict limits on these emissions, their European counterparts were more focused on carbon emissions. Only since the VW scandal broke has there been a great focus on the potential harm of NOx from diesel engines. As a result several regional legislators across Europe are proposing bans on diesel engines in city centres in the future.

Finally, if any of these investigations mean that official emissions and fuel economy figures for the cars in question are wrong, then tax authorities have a right to demand proper recompense, and owners deserve compensation.