December 10, 2017


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Frankfurt Auto Show 2017

Frankfurt Auto Show 2017

Allegations of cheating on diesel emissions controls were only days old the last time the auto industry gathered for the Frankfurt auto show, and the ensuing headlines overshadowed whatever announcements carmakers had planned. So it was understandable that organizers were eager this year to move beyond that sullied spectacle, preferring to focus on a fresh wave of electrification plans and future mobility efforts.

But German chancellor Angela Merkel was in no mood to put the emissions scandals of her country’s largest automaker in the rearview mirror. With the CEOs of Volkswagen, Mercedes-Benz, and BMW in the audience at the opening ceremony of this year’s Frankfurt show, she admonished industry leaders for their roles in jeopardizing the German economy and urged them to take full account of the diesel scandal before turning attention toward a future filled with autonomous and electric cars.

“Living in the future means learning from our mistakes,” she said. “Companies misused loopholes and not only hurt themselves but cheated the government and consumers. They need to regain trust as quickly as possible.”

For anyone who doesn’t remember, Volkswagen duped regulators by installing software that circumvented testing on millions of vehicles, which, unchecked, then spewed nitrogen-oxide emissions that exceeded permissible levels in the United States by as much as 40 times. That news broke in the midst of the 2015 Frankfurt show.

“We have to charge toward emission-free mobility. For cars, we have to make sure limits are respected and tests are conducted in real driving conditions.”

– German Chancellor Angela Merkel 

Approximately 11 million vehicles encompassing the Volkswagen, Audi, and Porsche brands were soon ensnared in the scandal worldwide. Volkswagen agreed to a $14.7 billion settlement in the United States in October 2016, but the global fallout continues. In August 2017, German government officials agreed to a software fix for 5.3 million diesel cars still on the country’s roads.

Yet with the automotive industry at the heart of the German economy, employing roughly 800,000 workers and generating about $470 billion per year, it was something of a surprise for Merkel to criticize industry leaders so bluntly at their signature event, only one week before her own re-election campaign concludes. She toed a line between outright hostility and appreciating the economic contributions. She acknowledged engineering efforts that have already made cars more fuel efficient but said they weren’t nearly enough to remove the pall from the scandal or pivot toward a future that involves reducing pollution at all costs.

German Chancellor Angela Merkel scolded automakers for their roles in the diesel cheating scandal that has rocked the auto industry.

“Increases in efficiency have been offset by bigger cars and more traffic on the road,” she said via an interpreter at the event. “Industry will have to come up with responses to car sharing, connectivity, and urbanization, which plays a role. Cities are affected by pollution. Only China is phasing out the internal-combustion engine. Germany needs to wake up and meet these global challenges.”

Going forward, she said, the principles behind the Paris climate accord should serve as an overarching guide for whatever steps the auto industry takes on future innovations. She singled out Norway and Finland as aspirational examples and touted financial incentives as a means of encouraging car owners to dump their older diesel vehicles in favor of electrics.

When I talk to people about automated driving, they look at me with wide eyes and say, ‘That’s 100 years away.’ You, the industry people, need to change that.”

– Angela Merkel

That doesn’t entirely mean she wants engineers to give up on improvements to cars that are still using internal-combustion engines. Noting that such cars will remain on the road for decades to come, Merkel acknowledged that automakers face dual challenges in wringing still more efficiency out of engines while simultaneously turning toward electric and other alternative power sources. Merkel also announced a billion-euro investment in infrastructure for pedestrians and bicyclists.

“We have to charge toward emission-free mobility,” she said. “For cars, we have to make sure limits are respected and tests are conducted in real driving conditions.”

Merkel wasn’t alone in urging further introspection and a full accounting of the toll these misdeeds have taken on the relationships with customers. Volker Bouffier, minister-president of the central state of Hessen, said the 2017 Frankfurt show will help “regain lost trust” and acknowledged that “the trust we have worked on for years can be easily lost.” Matthias Wissmann, chairman of the IAA, the trade association that runs the show, said, “We are aware we’ve lost some confidence.” Still, the two urged Merkel to avoid outright bans on diesel vehicles.

German chancellor Angela Merkel chats with Qualcomm CEO Steve Mollenkopf, right, during her appearance at the Frankfurt auto show on Thursday.

Outside the convention hall on the morning of Merkel’s visit, Greenpeace organizers staged a protest against gas-guzzling vehicles and the dependency of the country’s 46 million registered vehicles on “big oil.”

Aiming to rebuild trust, show organizers added a New Mobility World exhibit that augments the traditional unveilings of new vehicles. Following her remarks, Merkel toured this portion of the show, stopping at the Qualcomm showcase and asking about the longtime microchip maker’s role in the evolving auto industry.

Since connected and automated technologies will play a central role in future products, Merkel suggested, companies can do right by consumers by better explaining these new technologies.

“When I talk to people about automated driving, they look at me with wide eyes and say, ‘That’s 100 years away,’ ” she said. “You, the industry people, need to change that and help pull them into acceptance of these new technologies.”
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