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Emissions scandal threatens two family-owned car makers

Two more of Europe’s family-owned car makers could become caught up in the emissions scandal that has engulfed Volkswagen.

Two more of Europe’s family-owned car makers could become caught up in the emissions scandal that has engulfed Volkswagen.

Offices at PSA Group, which owns Peugeot and Citroen, have been raided, while tests on a Fiat model have suggested it might be programmed to deactivate pollutant controls outside test conditions.

The news comes seven months after VW, another of Europe’s family-owned carmakers, admitted some of its diesel cars were fitted with “defeat devices” that deactivated emissions controls when the vehicles were being driven on the road.

PSA Group announced this week that documents were seized by France’s General Directorate for Competition Policy, Consumer Affairs and Fraud Control when it visited the firm’s offices as part of an emissions investigation.

The company, 14% owned by the Peugeot family, insisted all of its vehicles complied with emissions regulations “in all countries where it operates”.

“Confident in [its] technologies, PSA Group is fully cooperating with the authorities,” a company statement said.

At the same time, German media have reported that tests by the country’s Federal Motor Transport Authority indicated that the quantity of pollutants emitted by a Fiat model, believed to be the 500X, increased heavily after the car had been running for 22 minutes. Emissions tests typically last 20 minutes, leading to the suggestion that the vehicle’s software is designed to ensure that emissions controls function during official analysis, but are inactivated under normal conditions. The German authorities have indicated they will carry out more tests on cars produced by Fiat, which is part of Fiat Chrysler Automobiles, controlled by the Agnelli family through its holding company EXOR.

The European Union has said that it too is looking into why cars from a string of manufacturers appear to breach pollution limits.

Professor David Bailey, an automotive industry specialist at Aston Business School, part of Aston University in Birmingham, United Kingdom, said with respect to PSA and Fiat that so far it had “not been proven they’re deliberately cheating”, although he cautioned that they could yet “get pulled into” the scandal.

“All we can say is that the ... car industry in general is producing cars that don’t meet emissions [regulations],” he said.

Bailey noted that the effects on VW have been significant, including a loss of market share.

“And they’re having to discount their products more heavily and throw money at customers to stop losing further sales. It’s hurt them financially,” he said.

As reported earlier this month, VW, controlled by the Piech and Porsche families, has recently allocated more than $1 billion to compensate owners in the US with affected cars, and has offered to buy back some of the 600,000 vehicles involved.

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