Tarun Mistry warns of possible systemic changes ahead in the wake of the auto emissions scandal

mistry tarun

There are potentially far-reaching implications for Volkswagen Group, and all the global automotive brands, of the emissions scandal.

If diesel technology is more polluting than previously reported, there could potentially be a significant, future shift to other fuels and that could accelerate hybrid and electric.

The problem that creates is around residual values (RV) for diesel product in the market place under lease or any form of finance. You could well see a drop if the product is perceived as unattractive, and that will impact profitability on existing contracts for the parties taking RV risk.

If the blame game then starts, the consequences get even more complicated.

Company car tax and duties may come under scrutiny if, as we anticipate, the UK government revisits whether nitrogen oxide pollution is more deserving of penalties compared to carbon dioxide – quite a scientific conundrum.

What is needed now is a full and open appraisal of the Volkswagen implication, a fully independent corroboration, and then some common sense.

Leasing and finance could be hit unless consumer confidence is retained – or indeed, restored!

Tarun Mistry is Head of Downstream Automotive at Grant Thornton Advisory,