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“Everyone Is Doing It”: How Carmakers Manipulate Emissions Test Results

With Germany’s largest company by revenue, Volkswagen, deep in damage recovery mode, and the market still unable to decide just how systemic and profound the fallout will be from the emissions scandal which has already cost the job of VW’s CEO and which according to some will impact the GDP of Hungary and the Czech republic as much as -1.5%, many are still trying to determine not if but how many other companies – whether “clean diesel” focused or otherwise – will be impacted by the crackdown on emissions fraud.

We don’t know the answer suffice to speculate that it will be “many” for one simpler reason: there are dozens of ways to manipulate emissions tests in both the lab and on the road, and with the temptation to “reduce” emissions all too great for management teams laser-focused on boosting profit margins, one can be certain that in this particular case not only is there more than one cockroach, there are dozens.

The chart below from Transport and Environment shows some of the traditional ways in which carmakers manipulate CO2 emissions tests to make their cars appear more efficient:

Worse, according to a follow-up report, it is only a matter of time before far more widespread crackdowns take place within the auto industry where emissions fraud now appears as systemic as that of the global banking sector.

As reported earlier this week, the gap between official test results for CO2 emissions/fuel economy and real-world performance has increased to 40% on average in 2014 from 8% in 2001, according to T&E’s 2015 Mind the Gap report, which analyses on-the-road fuel consumption by motorists and highlights the abuses by carmakers of the current tests and the failure of EU regulators to close loopholes. T&E said the gap has become a chasm and, without action, will likely grow to 50% on average by 2020.

By exploiting loopholes in the test procedure (including known differences between real-world driving and lab simulations) conventional cars can emit up to 40-45% more CO2 emissions on the road than what is measured in the lab. But the average gap between test results and real-world driving is more than 50% for some models. Mercedes cars have an average gap between test and real-world performance of 48% and their new A, C and E class models have a difference of over 50%. The BMW 5 series and Peugeot 308 are just below 50%. The causes of these big deviations have to be clarified as soon as possible.

Greg Archer, clean vehicles manager at T&E, said: “Like the air pollution test, the European system of testing cars to measure fuel economy and CO2 emissions is utterly discredited. The Volkswagen scandal was just the tip of the iceberg and what lies beneath is widespread abuse by carmakers of testing rules enabling cars to swallow more than 50% more fuel than is claimed.”

Greg Archer concluded: “This widening gap casts more doubt on how carmakers trick their customers in Europe to produce much better fuel efficiency in tests than can be achieved on the road. The only solution is a comprehensive investigation into both air pollution and fuel economy tests and all car manufacturers to identify whether unfair and illegal practices, like defeat devices, may be in use. There must also be a comprehensive overhaul of the testing system.”

Who are the biggest European culprits.

The cost: distorted laboratory tests cost a typical motorist €450 a year in additional fuel costs compared to what carmakers’ marketing materials claim, the report finds.

Now multiply that by tens of millions of cars and you get a sense of the potential industry liability, especially since can be absolutely certain Europe’s US carmaking peers are just as guilty of emissions manipulation.

Finally, to paraphrase Dr. House, everybody lies.

 

daily alternative | alternative news – How Carmakers Manipulate Emissions Test Results

via “Everyone Is Doing It”: How Carmakers Manipulate Emissions Test Results 

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Britain’s House Price Crash – 2016 Predictions Mount

Housing in many countries, especially Britain, is no longer an investment; it’s now made up of three fundamentals: consumption, crime and concern. The general public getting on the bandwagon with cheap loans is consumption. The crime slot is taken now that over 40% of Britain’s housing stock is bought in cash with property used as an international laundrette to wash hundreds of billions and concern comes from savers who quite rightly think that the banks and government will steal their hard-earned (low or negative savings rates), tax-paid money that drives a reluctant middle class into becoming landlords.

Cheap loans will prevail but credit is drying up the world over. The criminals have stopped buying in over-heated Britain and even George Osborne, who has fueled the bubble, is taking action against amateur landlords that make up the vast majority of property investors in Britain.

But don’t take my word for it. Predictions of a house price crash in 2016 are now mounting thick and fast, something unheard of in previous property recessions and particularly back in 2007 just before the last epic fall.

We kick off with consumption. The Week has a piece from Pete Redfern, the chief executive of Taylor Wimpey, Britain’s biggest house builder who says that “The UK is in a “borderline place” on home ownership as a result of rampant price rises and more needs to be done to rein in the pace of (property) inflation”. It also makes the observation that “London, where the housing market is becoming so detached from the wider UK that it has been called “another country”.

Then we have dodgy dosh from overseas; as RT reports – “Asian and Russian luxury homebuyers are deserting London’s property market amid economic uncertainty. Property buyers from Asia made up 26 percent of those buying homes in wealthy areas of London such as Kensington, Chelsea, and Belgravia in the first three quarters of last year. That figure has dropped to 6 percent according to figures compiled by estate agent Hamptons for the Financial Times”.

And not forgetting those poor fearful middle class reluctant landlords about to lose their shirts. From industry expert Letting Agent Today – “Osborne has slashed rental sector confidence ‘to below crisis levels’. Landlords’ confidence in the buy to let sector has collapsed to an all-time low and is now “worse than levels witnessed during the financial crash” according to a trade body. Richard Lambert, chief executive of the National Landlords Association, says confidence in landlords’ business expectations has tumbled by more than a third over the past year – down from 67 per cent to an all-time low of 43 per cent. The current level of confidence in the BTL sector is now five per cent lower than levels witnessed after the financial crash in 2007”.

The property bubble will burst and London will be its epicenter. But it’s not just London that is causing it. Back in the early 1990s I was already a few years into my 25-year career in residential property. Chancellor Nigel Lawson decided to abolish MIRAS in 1988 – a mortgage relief scheme which saved homeowners thousands on their payments. Stupidly, Lawson gave about six months notice. This pushed up prices as buyers rushed to snatch up a property before the tax break disappeared, much the same as Osborne’s increase in tax and subsequent epic run by property investors to beat the deadline this April.

On that day in April 1988 I saw the entire property industry implode. Property prices fell by around a third, 1.5 million homeowners declined into negative equity, annual repossessions doubled, tripled and then quadrupled in a matter of months. At one point repossessions represented 1 in every 130 households of Britain.

A few years later I switched from selling property to renting and ended up managing one of the biggest residential rental portfolios in the UK. I had 11,000 repossessions to manage because the government had offered tax breaks to banks and building societies to stop these units reaching the market via auctions (called Business Expansion Scheme Companies or BESCo’s) and utterly destroying what little remained of the housing market. I also had another 2,000 high-end units where building companies had gone bust with no one to buy them. We filled them with all those that had lost their homes or where the government were paying housing benefit – obviously.

Over 40% of Thatcher’s right-to-buy disaster ended up being repossessed. Cameron has just made the same mistake, except he’s a bit late in the game announcing it this time around.

Like last time, the bubble will burst where the price is most inflated – London. Unlike previous deflations, this one is predicted, and the writing is large and loud.

 

daily alternative | alternative news – Britain’s House Price Crash – 2016 Predictions Mount

via Britain’s House Price Crash – 2016 Predictions Mount.

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