VDA's influence over Brexit terms hit by Dieselgate says ZF CEO, as VW’s US modified diesels approved

31 March 2017

The ability for the German auto industry to lobby for tariff-free trade in the upcoming Brexit negotiations has been diminished following the Volkswagen (VW) emissions scandal, says the CEO of German auto supplier giant ZF.

Referring to German lobby group the VDA, Stefan Sommer said: ′The last two years the automotive association in Germany lost a lot of credibility.’

Following the UK’s triggering of the two-year process to leave the EU on Wednesday, both the UK and German auto industries, which are highly interconnected, fear that punitive tariffs will be included in a future trade deal. This is because EU leaders fear that a positive exit for Britain would encourage other countries to do the same, further destabilising the block.

Such political fears would ordinarily be counteracted by powerful trade associations advocating for as close as possible continued relationships, but Dieselgate still holds a dark cloud over the VDA in political circles.

ZF has €1.9 billion worth of revenue in the UK, including supplying eight-speed automatic transmissions to Jaguar Land Rover, the largest producer of cars in the UK, as well as VW’s Bentley and Aston Martin. It recently entered into the autonomous tech race alongside Intel’s Mobileye and Nvidia, Bosch, by acquiring a 45% stake in Germany’s Astyx Communication & Sensors, which develops and produces ultra-high-frequency radar sensors and modules. Last year, a ZF unit also acquired an interest in Ibeo Automotive Systems GmbH, a lidar and sensor fusion company in Hamburg.

Meanwhile, VW has announced that the US Environmental Protection Agency has approved for it to sell up to 67,000 diesel vehicles from the 2015 model year. This includes around 12,000 diesels with approved emissions modifications currently held in dealer inventory, following VW issuing a stop sale when the scandal broke in September 2015. VW has also settled diesel claims in 10 US states for $157 million (€147 million). New York attorney-general Eric Schneiderman said the settlement sets an important precedent for state law taking up the mantle as President Trump prepares to roll back federal environmental regulations.