$83 Million = Coilpack Recall Cost Estimate <more>
02-11-2003, 08:21 AM
#1
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$83 Million = Coilpack Recall Cost Estimate <more>
From today's "autotech daily"
RECALL CREATES PROBLEMS FOR VW
Volkswagen AG's recall of 530,000 vehicles in the U.S. may prove to be much costlier
than the estimated $83 million the automaker will spend to replace faulty engine ignition
coils, warns Automotive News. It notes the problem could affect the launch of two new
vehicles this year: the Touareg SUV and Phaeton luxury sedan.
The VW recall announced last week involves replacing "pencil" ignition coils used in
a variety of Audi and VW models. Another 320,000 vehicles, including Seat and Skoda
cars, are affected by the recall in other markets. If a coil fails, the engine loses power andruns rougher.
To head off a potential backlash, dealers want VW to give customers $1,000 coupons
toward the purchase of their next VW vehicle. The proposed voucher could be used by
any immediate family member and would be applied after the best deal has been negotiated. VW is said to be considering the request.
AN says the defective coils are made by Bremi Auto-Elektrik, a small German
supplier whose revenues only totaled about $43 million last year. The problem may stem
from the coil's insulation material, which can become brittle, according to the newspaper.
Most of the affected vehicles are 2001 and 2002 models equipped with turbocharged
four-cylinder 1.8-liter engines.
Replacing a damaged coil takes less than an hour and only costs $22.90, according
to the VW Dealer Advisory Council. But there aren't enough parts to go around. Even with
Bremi working around the clock and a second supplier added to the mix, VW doesn't
expect to be able to repair all affected models for at least two months.
VW says it is doing everything it can to fix the problem and is reimbursing owners for
previous repairs. But it concedes the process will take time. The automaker expects dealers
to make the repairs without adding additional staff or outsourcing the work. VW didn't
say if it would ask Bremi to pay for any or all of the recall.
AUTOTECH DAILY
is a publication of
Hampton AutoBeat LLC,
Box 33068
Bloomfield Hills, MI
48303-3068
RECALL CREATES PROBLEMS FOR VW
Volkswagen AG's recall of 530,000 vehicles in the U.S. may prove to be much costlier
than the estimated $83 million the automaker will spend to replace faulty engine ignition
coils, warns Automotive News. It notes the problem could affect the launch of two new
vehicles this year: the Touareg SUV and Phaeton luxury sedan.
The VW recall announced last week involves replacing "pencil" ignition coils used in
a variety of Audi and VW models. Another 320,000 vehicles, including Seat and Skoda
cars, are affected by the recall in other markets. If a coil fails, the engine loses power andruns rougher.
To head off a potential backlash, dealers want VW to give customers $1,000 coupons
toward the purchase of their next VW vehicle. The proposed voucher could be used by
any immediate family member and would be applied after the best deal has been negotiated. VW is said to be considering the request.
AN says the defective coils are made by Bremi Auto-Elektrik, a small German
supplier whose revenues only totaled about $43 million last year. The problem may stem
from the coil's insulation material, which can become brittle, according to the newspaper.
Most of the affected vehicles are 2001 and 2002 models equipped with turbocharged
four-cylinder 1.8-liter engines.
Replacing a damaged coil takes less than an hour and only costs $22.90, according
to the VW Dealer Advisory Council. But there aren't enough parts to go around. Even with
Bremi working around the clock and a second supplier added to the mix, VW doesn't
expect to be able to repair all affected models for at least two months.
VW says it is doing everything it can to fix the problem and is reimbursing owners for
previous repairs. But it concedes the process will take time. The automaker expects dealers
to make the repairs without adding additional staff or outsourcing the work. VW didn't
say if it would ask Bremi to pay for any or all of the recall.
AUTOTECH DAILY
is a publication of
Hampton AutoBeat LLC,
Box 33068
Bloomfield Hills, MI
48303-3068
02-11-2003, 08:39 AM
#3
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Did VAG engineers design the coilpack, or was it this Bremi Auto-Elektrik company?
I would think if it was the BAE co. that designed it, they would be somewhat responsible for the cost of replacement.
02-11-2003, 09:05 AM
#6
AudiWorld Super User
Well, the design worked fine when made by a japanese company, then when they switched suppliers...
...they started failing. SO I am guessing the design is fine, and the supplier is at fault. It doesn't effect 2000 A4s, and they have the same coil pack design as the '01s.
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02-11-2003, 09:18 AM
#8
AudiWorld Expert
there was a rumor a few weeks/months ago that Bremi changed the initial CP design...
approved by Audi without Audi knowing. Apparently Bremi reduced the amount of insulation on the CPs in order to reduce their manufacturing costs.
Not sure how much truth this holds.
It is a fact, however, that Bremi does offer another, more robust, CP design, which is of course more expensive and not used by Audi.
Not sure how much truth this holds.
It is a fact, however, that Bremi does offer another, more robust, CP design, which is of course more expensive and not used by Audi.
02-11-2003, 09:23 AM
#9
AudiWorld Expert
like I said yesterday...
Bremi is a pretty small company, with annual revenues of only around $40 mil. If VAG is going to stick them with an $83 mil bill, Bremi will go belly up.
For the time being, VAG depends on Bremi for a substantial amount of coilpack production, so they can't kill them like that, or at least not right away. I was suggesting that VAG just buys out Bremi to have full control of the CP supply.
For the time being, VAG depends on Bremi for a substantial amount of coilpack production, so they can't kill them like that, or at least not right away. I was suggesting that VAG just buys out Bremi to have full control of the CP supply.