Amid Emissions Scandal, Volkswagen’s U.S. Injury Reporting Called Into Question

October 9, 2015

Volkswagen AG reported death and injury claims at the lowest rate of any major automaker in the U.S. over the last decade.

The numbers are so good that some industry experts wonder if they add up.

Volkswagen emissions test certificateThe average reporting rate of the 11 biggest automakers was nine times higher than Volkswagen’s, according to an analysis of government data completed last week by financial advisory firm Stout Risius Ross Inc. at the request of Bloomberg News.

This year, two of Volkswagen’s competitors, Honda Motor Co. and Fiat Chrysler Automobiles NV’s U.S. unit, have said they underreported claims to the U.S. government, and Honda paid a fine. Volkswagen’s rate is lower than Honda and Chrysler’s underreported numbers, the data show. To ensure fair comparisons among carmakers of different sizes, the rates were calculated per million vehicles on the road.

“The data demonstrates that even on a fleet-adjusted basis, the number of reported incidents by Volkswagen is significantly below what one would expect based on those reported by other automakers,” said Neil Steinkamp, a Stout Risius managing director. “They are also significantly below the reporting of automakers that have already been cited for non-compliance.”

Jeannine Ginivan, a Herndon, Virginia-based Volkswagen spokeswoman, declined to comment.

The reporting of death and injury claims is part of the National Highway Traffic Safety Administration’s so-called early-warning system to spot vehicle-defect trends in an attempt to reduce fatalities.

In response to the Chrysler admission, U.S. Transportation Secretary Anthony Foxx said Sept. 29 he’s summoning automakers to Washington to discuss the need for accurate reporting of safety defects, including the death and injury reports. In December, NHTSA asked automakers to review their compliance with the 15-year-old reporting requirement.

The rule stems from a law enacted in 2000 after reports that Bridgestone Corp.’s Firestone tires were disintegrating in hot-weather states, causing Ford Motor Co. Explorer SUVs to roll over.

Early Warning

The heart of the law was the early-warning report system, created because lawmakers concluded that the Firestone debacle could have been avoided if regulators had known what the companies knew. The intent was to give NHTSA and the public access to a broad overview of data to spot potentially deadly defects earlier.

NHTSA is focused on improving the system of reporting potential defects, both through monitoring automaker reports and making its analysis of the data more effective, spokesman Gordon Trowbridge said in an e-mail. The agency is implementing recommendations of an audit by the Transportation Department’s inspector general, including more actively following up on fatality reports and lawsuits, he said. He had no comment on specific automakers’ compliance.

Clarence Ditlow, executive director of the Washington-based watchdog Center for Auto Safety, said that Volkswagen’s numbers are so low that he questions how they were compiled.

“NHTSA doesn’t have the resources to police all of this, but now they’re asking the automakers to tell them whether they’re in compliance,” Ditlow said. “For the automakers, it’s a time of reckoning.”

President Barack Obama’s budget for next year called for enough money to hire seven additional staff on top of the four who currently analyze early-warning data, Trowbridge said. Congress hasn’t acted on the department’s budget.

Honda Fined

In January, Honda was fined a record $70 million for underreporting to the same NHTSA database. Fiat Chrysler’s U.S. unit last month said it violated the requirements of the same law. Both companies were reporting at a rate at least twice that of Volkswagen, according to the Stout Risius data compiled for Bloomberg.

The Stout Risius analysis compared the number of incidents reported by the automakers to NHTSA over the last decade with the number of vehicles sold by each automaker that were estimated to still be on U.S. roads at the time. That data was converted into a ratio of death and injury reports per million vehicles on the road.

Of the 11 vehicle manufacturers – representing 88 percent of U.S. industry sales – General Motors Co. reported the most, at 524 incidents per million vehicles. Volkswagen had the lowest rate, with 34 per million. The average was about 301 per million vehicles on the road. Three companies — GM, Toyota Motor Corp. and BMW — were above the average.

The underreported rate for Chrysler was 101 while Honda’s was 78.

Nissan Motor Co., which also disclosed 78 incidents per million vehicles, “fully complies” with all reporting obligations, spokesman Steve Yaeger said in an e-mail. “Nissan’s position is that our reporting rates are not ‘low,’ but accurate and consistent with our regulatory obligations,” he said. Nissan has not been accused of any wrongdoing.

Volkswagen admitted Sept. 18 that it had cheated on U.S. air pollution tests since 2009. The stock price has tumbled and the chief executive officer has been replaced. Michael Horn, Volkswagen of America’s president and CEO, is scheduled to testify about the emissions scandal to the House Energy and Commerce Committee’s investigations subcommittee on Thursday.

(With assistance from Elisabeth Behrmann in Munich.)

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