Page 25 - atoday

BUSINESS A25
Tuesday 10 November 2015

Strains of low oil prices apparent Volkswagen and Audi diesel owners to
even at plush Abu Dhabi meeting get $1,000 in gift cards and vouchers

JON GAMBRELL TOM KRISHER change or new set of tires, action lawsuits have been
Associated Press or even a down payment filed in the U.S. against VW
ABU DHABI, United Arab Emirates (AP) — On stage AP Auto Writer on a new car. The offer alleging that the scandal
only a short time after the United Arab Emirates said also includes free roadside caused the diesel cars to
it would increase its oil production despite low world- DETROIT (AP) — Owners of assistance for the diesel ve- drop in value.
wide prices, the oil and gas minister of neighboring hicles for three years. Average auction prices
Oman didn’t pull any punches. 482,000 diesel Volkswagens “We are working tirelessly of VW diesel models have
“This is (a) man-made crisis in our industry we have to develop an approved dropped nearly $2,100, or
created. ... And I think all we’re doing is irresponsible,” and Audis in the U.S. are eli- remedy for affected ve- 16 percent, since the an-
Mohammed bin Hama al-Rumhy said as his Emirati hicles,” said Michael Horn, nouncement, while VW
counterpart forced a smile next to him. gible for $1,000 in gift cards VW’s U.S. CEO, said in a gasoline models have fall-
Even among friends, the bottoming-out of oil prices, statement. “In the mean- en 4 percent, Kelley Blue
which are down more than 50 percent since the and vouchers as the au- time we are providing this Book said Monday.
middle of last year, has strained both budgets and goodwill package as a first Josh Badall, of Phoenix, Ari-
relationships across the Gulf and other oil-producing tomaker strives to placate
countries.
And while Emirati officials at the annual Abu Dhabi In- customers dismayed by an
ternational Petroleum Exhibition and Conference said
Monday they believed prices will head back up into emissions-rigging scandal.
next year, others offered a more pessimistic view.
“It’s a movement of an era of scarcity to one of abun- VW announced the offer
dance; it’s a movement from a world of unexpect-
edly strong demand and tight supplies to a world of Monday. The car owners
ample supplies — even oversupplies — and weaker
demands,” said Daniel Yergin, vice chairman of IHS have been in limbo since
and the author of a Pulitzer Prize-winning book on the
history of oil. “OPEC’s not the only balance of the mar- mid-September, when
ket. The United States is back in the role of swing pro-
ducer, a role it hasn’t exerted in six decades,” he said. A model poses next to a Volkswagen car in the media preview of the Tokyo Motor show in
Fluctuating oil prices are nothing new, but this time
the U.S. has found itself roaring back into the industry Tokyo, Wednesday, Oct. 28, 2015. (AP Photo/Eugene Hoshiko)
with the mass production of shale oil and reduced de-
pendence on imports. VW admitted the cars are step towards regaining our zona, just sold his 2009 Jetta
U.S. shale, a weakening economy in China and other equipped with software customers’ trust.” TDI because of the scandal
factors have pushed prices down. On Monday, Brent that turns on pollution con- Steve Kalafer, chairman of as well as a host of me-
crude, a benchmark for international oils, was at trols during government the Flemington Car and chanical problems.
$47.63 in London, down from well over $100 a barrel tests and turns them off Truck Country dealerships He bought the car used for
last year. While the U.S. production has dialed back while on the road. in Flemington, New Jersey, $9,000 in 2013 and recently
due to low prices, even more oil will soon enter the VW has yet to unveil a fix said Volkswagen’s offer is sold if for less than the Kel-
market, including an expected flood of Iranian ex- for the cars. The U.S. En- a welcome first step after ley Blue Book value, at
ports once sanctions are lifted under a landmark nu- vironmental Protection a long silence between the $6,500.
clear deal. Despite that, the Emirati energy minister Agency says the cars, with automaker, its customers “I don’t think solving it in a
said he believed prices would rise in 2016, even as he 2-liter four-cylinder diesel and its U.S. retailers. retrospective manner like
said his country planned to ramp up production to 3.5 engines, emit 10 to 40 times Kalafer said he hasn’t that really changes a whole
million barrels of oil a day from a current 2.9 million. the allowable amount of heard yet from any cus- lot of anything, especially
The Emirates was the world’s sixth-largest oil produc- harmful nitrogen oxide tomers about Volkswa- considering the value of
er in 2014, according to the U.S. Energy Information while being driven. gen’s offer, but he expects those vehicles now is pretty
Administration. That 3.5 million barrel production will “The problem that most they’ll want more from the bad,” he said.
come in the “next two to three years,” said Abdulla of us suffer from is we’re in company to address the To get the gift cards and
Nasser al-Suwaidi, the director-general of the Abu never-never land so this at many issues raised by the vouchers in the U.S., owners
Dhabi National Oil Co. “We are hopeful that we will least gives us some com- emissions scandal. will not be required to sign
see in 2016 ... a correction,” Emirati Energy Minister Su- pensation until they figure “They will appreciate the anything giving up their
hail Mohamed al-Mazrouei said. “Don’t ask me how it out,” said Bob Rand, a communication, but I right to sue Volkswagen or
big, that’s for the market to decide. Don’t ask me who retired judge in Pasadena, imagine that until a real force them into arbitration,
is going to play that role. It’s not going to be OPEC California, who says he resolution is found that ap- spokeswoman Jeannine
only. This is an international effort. Everyone has a and his wife have owned preciation will be muted,” Ginivan said. “There are no
role to play.” But speaking in Qatar at the same time, at least a dozen new Volk- he said. strings attached,” she said.
Saudi Prince Abdulaziz bin Salman bin Abdulaziz, dep- swagens over the years. Whatever fix VW designs Volkswagen already is of-
uty minister of petroleum and mineral resources, cau- The $500 Visa gift card can could wind up hurting per- fering $2,000 to current
tioned against making too many cuts amid the swing be used anywhere, while formance or perhaps fuel VW owners to trade in their
in prices. “As we saw back in 2008, high oil prices the $500 voucher can be mileage, the two main rea- cars for new vehicles, and
proved to be unsustainable, and the price fell sharp- used at a VW dealership sons why people buy die- the gift cards and vouchers
ly following the great financial crisis. But this works in for things such as an oil sels. More than 200 class- would add $1,000 to that.q
the opposite direction,” the prince said, according to
a copy of his speech carried on the state-run Saudi
Press Agency. “A prolonged period of low oil prices is
also unsustainable, as it will induce large investment
cuts and reduce the resilience of the oil industry, un-
dermining the future security of supply and setting the
scene for another sharp price rise.”q