Volkswagen is still seeing its business activity impaired by the 2015 scandal regarding emission tests. The United States Environmental Protection Agency found that the engine control unit was faulty installed in Volkswagen cars. As a consequence, the company violated the Clean Air Act by being responsible for more toxic emissions released into the atmosphere than it stated it is. This particular software can detect emissions testing. Afterwards, it was able to control ECU emissions to pass the tests successfully. This revelation led to a major scandal that affected the public image as well. In order to escape the repercussions of this event, Volkswagen is willing to start merger talks with its competition.
A Stronger Competition Urged Volkswagen to Consider Merger Talks
After 18 months from the emissions scandal, the German automaker is still nowhere near its former glory. The company marketed its 2015 line of diesel cars as the most environmentally friendly on the market. However, EPA gave away the company’s schemes to trick the system into seeing it as in compliance with the ecological claims.
As the company is still dealing with the consequences of its business decisions, the competition is gaining more ground than ever in Europe. Peugeot maker PSA Group has just decided to purchase the Opel business from General Motors. This way, Volkswagen’s market supremacy is threatened by a second player that has just become stronger than ever.
A Coalition Between Volkswagen and Fiat Would Render Benefits on Both Sides
Even though Volkswagen rejected the offer before, Sergio Marchionne, the leader of the Fiat Chrysler Automobiles revived the proposal last week. This offer regards a tie-up between the two automakers. On the other hand, the CEO at Volkswagen, Matthias Mueller, seemed to have reached the same page as of recently. On Tuesday, he made a public affirmation during his 2016 income presentation that he would be interested in initiating some merger talks with Fiat Chrysler.
“It would be very helpful if Mr. Marchionne were to communicate his considerations to me too and not just to you,” Volkswagen CEO told journalists.
Many experts in this industry believe that a tie-up between the two giants would be enough to create a more powerful European market. Both VW and FCA have great potential, and together they can have a share of up to 30%. FCA would empower the VW presence in North America thanks to the operations of the Chrysler. On the other hand, Volkswagen will help this partnership in its turn by improving FCA’s scale in Asia.
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