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Cruze Diesel sales remain consistent amid VW scandal
By Kalea Hall
YOUNGSTOWN
In the wake of Volkswagen’s public deception over added software to pass U.S. emission tests on diesel cars, analysts are left to wonder what is next for the German automaker.
At the same time, General Motors has to consider how this might affect the Lordstown-built Chevrolet Cruze Diesel.
“Cruze Diesel sales have remained steady, and it is something we are keeping our eye on,” said Annalisa Bluhm of Chevrolet communications. “We haven’t witnessed an impact, and we do not foresee an impact.”
Last month, Volkswagen admitted it cheated on U.S. emissions tests with an added software that would fool the tests. The software would release less smog-causing emissions than the vehicles actually did in real-world driving conditions.
Volkswagen said in the U.S., 500,000 diesel cars were affected and 11 million vehicles had the software installed worldwide. The cars affected include the Audi A3, Jetta, Beetle, Golf and Passat models.
Today, Volkswagen Group of America CEO Michael Horn will testify before the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations. He will announce the company has withdrawn its application for certification of the model year 2016 vehicles, according to Horn’s testimony posted on Volkswagen’s website.
“To blatantly do something like that doesn’t do any good for the industry as a whole,” said Glenn Johnson, head of the United Auto Workers Local 1112, who represents assembly plant workers at the Lordstown plant. “It just hurts all of us in the court of public opinion.”
UAW Local 1714 President Robert Morales thinks the Volkswagen headlines could lead to a positive impact for the Cruze Diesel.
“If anything, it may affect our sales with new customers buzzing by and checking out Cruze Diesels,” Morales said.
Diesel vehicles may be more efficient than gas vehicles, but they emit higher levels of nitrogen oxide, which can add to ozone buildup and respiratory illnesses. The EPA has launched changes to the way it tests diesel models. It will now add on-road testing and use conditions to detect if a software is in use to defeat the test.
“Right as [diesel cars] are starting to get some momentum and traction, this happens,” said Eric Lyman, vice president for industry insights at TrueCar. “It could potentially be a huge blow to the diesel power trans.”
TrueCar data shows an overall drop in demand for Volkswagen. Given what other automakers have survived in the past, Lyman believes Volkswagen will survive. But there are some differences in what Volkswagen faces.
“We don’t know how consumers are going to react to this deception,” Lyman said. “That is untested in the market.”
Former Volkswagen CEO Martin Winterkorn resigned after he apologized to the public for the company’s deception.
The company halted sales of 2015 and 2016 diesel models of the Passat, Jetta, Golf and Beetle. Volkswagen’s sales in September were up by less than 1 percent in October in the U.S.
On Tuesday, Volkswagen’s new CEO, Matthias Mueller, told thousands of workers at the company’s Germany home base: “We will overcome this crisis,” but overcoming it will be painful.
Lyman explained that while many automakers have looked at adding a diesel car to their U.S. offerings, they saw the challenges in passing the emissions tests here and realized the heavy costs associated with making diesel models.
In early 2013, GM unveiled the diesel version of its best-selling compact car, the Cruze, to the U.S. market.
“I think it was more of an experiment,” Lyman said of the Cruze Diesel.
GM said next-generation Cruze diesel production at the Lordstown plant will come in 2017. The company would not comment on the current status of production of the Cruze diesel.
The diesel version of the Cruze has brought in a new customer to Chevrolet. Last year, there were about 6,000 Cruze diesel models sold and this year more than 2,000 have been sold to date. Last year, readers of The Diesel Driver magazine named the 2014 Chevrolet Cruze Diesel best diesel car of the year.
Its features include 46 miles to the gallon on the highway.
“It is appealing,” Bluhm said. “The look and feel grabs people in. The intent was to bring people into the brand. We are still impressed by it bringing in new buyers.”
The Associated Press contributed to this story.