A rumination on VW…

So Volkswagen has walked away from the World Rally Championship and its sister brand Audi has left the World Endurance Championship, leaving another sibling brand Porsche to dominate the dance floor.  

Audi says it is going to get involved in Formula E, but leaving Le Mans for the all-electric championship is a bit like quitting the Bolshoi in order to star in a clog dancing contest at the Frinton Summer Theatre. 

So what is going on? Yes, the VW group needs to save some money to pay for its transgressions relating to fiddling emissions and it said last week that the cost of that scandal has now reached $20.7 billion. Despite this and a drop in profits, the firm is still going to meet revenue projections this year of more than $200 billion. It does need to focus on cutting high-cost operations in Germany to help to pay for the planned shift to new ranges of electric and hybrid cars. While one can understand the need for cuts, the company still needs to advertise its products and Formula E is not going to do that on a global scale, nor will it promote hybrids.

What’s really interesting is that the lead engineer of the original Toyota Prius project, Satoshi Ogiso, has recently been telling Forbes that the cost of hybrid cars is now dropping below both diesel and electric. Diesels have been huge in Europe because they were seen as the only cheaper way than hybrids to meet emission regulations. With diesels now getting expensive new emission systems, their business case is crumbling. Ogiso also doesn’t believe that electric cars will become the dominant force for at least 20 years,  because of the cost of developing long distance batteries. He feels that there will now be a lot of investment in battery research – but a lot more hybrid sales, particularly if the price of oil goes up. A lot of European car firms are busy adding hybrids and plug-in hybrids to their ranges in expectation of this trend.

Could it be that this demolition of VW’s sporting programmes is actually the first step towards a major hybrid sporting programme for the company in 2018? And is there any place to do this cost-effectively other than in F1? As I have written elsewhere, I don’t understand Red Bull’s apparent lack of any long-term engine strategy in F1 and I cannot help but wonder if Audi and the Austrians will not take us all by surprise in a few months from now, once it has agreed deals with its powerful unions over cost-cutting.