VW Group’s admission that they deliberately and fraudulently installed software in c11 million of their diesel cars to fool emissions testers is startling. We are now sadly used to big business issuing mea culpa statements due to the activities of rogue employees (banks and the fixing of LIBOR rates) , refusals to admit defects in their products (Toyota) or plain negligence (BP in the Gulf of Mexico) but never before have we seen one of the biggest companies in the world admit (but only after being caught) to defrauding their customers and the regulators.

The legal impact on VW will be disastrous. The key issue will be less the fraud in terms of co2 emissions and fuel economy (many do not care about the former and have long believed the latter to be manipulated) but rather it is the issue of NOX emissions that may kill VW.  This is primarily because NOX emissions are believed to be responsible for many fatalities worldwide. As such, fines in the U.S. alone will amount to billions. A number of possibly quite senior people will go to prison. I strongly suspect VW will only survive if the German government intervenes and even then I expect we will see the company broken up.

Whilst it is possible to shed tears for the innocent workers of VW Group surely there can be no sympathy at all for a company that deliberately pursued a fraud that it knew would contribute to the deaths of thousands?