Opinions mixed on VW impact

Friedrichshafen, Germany — With the Volkswagen AG diesel-emissions scandal nearly a month old, the reaction from the automotive supply industry has been largely watch-and-wait.

Plastics News reporters spoke with industry representatives at Fakuma 2015 in Friedrichshafen about the impact of the VW news.

Opinions were mixed on whether the reveal of cheat software from a major German manufacturer will hurt the country's reputation as an engineering and technology powerhouse.

“I think overall it was a huge impact of the credibility of German reliability,” said Korbinian Kiesl, president and CEO of Billion SA, the French maker of injection molding machines.

But a hit to Volkswagen's credibility does not necessarily mean a big impact for the automotive industry overall, he added.

Peter Neumann, CEO of Engel Holding GmbH, of Schwertberg, Austria, expects minimal damage to the larger German auto industry.

“It's limited. I'm quite sure that whatever is the reason for this in Volkswagen, in the rest of the industry they are very strict and we know … all the rules and regulations.”

Reputation aside, additional fallout could roll down Volkswagen's supply chain, possibly inevitable for such a major manufacturer. Amid reports this week that Volkswagen would seek billions of euros in price cuts from its suppliers to help mitigate the costs of the scandal, machinery suppliers at Fakuma reported feeling some uneasiness in that sector.

Volkswagen has not released a plan for such cuts. One possibility would be continuing to use existing technologies in lieu of developing new components and molds, which some toolmakers suspect. Some processors have told their machinery suppliers they have been urged to temper the development of new technologies.

But it's not all doom and gloom in the supply chain. An automotive toolmaker supplying Europe said he sees potential opportunity in the increased publicity the scandal has directed at automotive efficiency technologies and Volkswagen's stated intent to increase its focus on electric cars. Both changes could drive demand for new tools.

Covestro AG CEO Patrick Thomas is optimistic for the long-term.

“It's a net positive,” he said. “The car industry has to adapt to consumer expectations of more efficient emissions. The technology is there to do it. It's a wake-up call. You have to do things for real. You can't greenwash. You can't get away with cheating consumers.”

Materials suppliers in particular seem to be taking confidence in their diversified business models. Though automotive market volumes may shift from one automaker to another, total demand is not expected to decline, and other manufacturers they supply will simply pick up the slack.

“Our view is the consumer demand will be there,” said Maria Ciliberti, vice president of sales for Europe at Celanese Corp., adding the most succinct take of the show: “People will still buy cars.”

Plastics News Europe and PRW reporters contributed to this report.