Thousands of customers in Europe and the US have been driving cars which lacked proper permits from authorities. It’s another ugly scratch on Volkswagen’s reputation following the Dieselgate fraud.

Another scandal has emerged at VW. The carmaker, the world’s largest in 2017, has for years sold vehicles which lacked approval from motor transport authorities to go on the road. From 2006 to 2018, Volkswagen sold around 6,700 test cars in Europe and the US, a VW spokesman said, confirming German media reports. Around 4,000 were sold in Germany and the remainder in the rest of Europe or North America.

The cars, made to test and showcase new models before the launch of large-scale series production, should officially have been scrapped, but instead VW sold them as new or second-hand cars. The problem: motor transport authorities never approved these test models, only the ones produced in series.

The number of affected vehicles is tiny compared to the 11 million diesel cars VW manipulated between 2007 and 2015, but the affair is bad news for the carmaker, as it is trying to overcome Dieselgate. Once again it gives the impression that VW could not be bothered to comply with the law and didn’t care all that much about its customers.

The matter is also painful for Herbert Diess, CEO of Volkswagen Group since April. Diess was informed about the problem as early as July 2016, when he was still head of the VW passenger brand, current affairs magazine Spiegel reported Friday. However, it took more than two years before the carmaker informed its customers and Germany’s Motor Transport Authority that the cars were sold without proper licensing.

“The fact that these are VW models built between 2006 and 2018 shows (…) that Volkswagen has not understood anything, even three years after the diesel scandal became known," said Klaus Müller, head of consumer rights group VZBV. He spoke of another “failure on the part of management.”

VW had no knowledge of any accidents due to the use of the test cars sold, but was recalling them because it was not certain how different the test vehicles were from the ones that were eventually approved, a VW spokesman said. Some models only needed a software update or a new navigation system to make them compliant, but others were so different from production cars, their only destination would be the scrap yard. VW explained that potential safety issues were the reason for the recall.

The VW spokesman also added that the cars could have been sold legally if the carmaker had properly documented how the test models deviated from the production cars. But this was not done at the time, so now nobody knew what was wrong with which test car, if anything. VW's procedures have since changed and now these differences are noted.

Other local car companies, including Opel, Volvo and Daimler, said that they don't sell test vehicles. "It's a gigantic mistake," an industry representative said.

The matter has been deemed a serious offense by local authorities and the German Transport Ministry is deciding whether to fine VW a couple of thousand euros per test vehicle sold. Legal experts said VW may also face lawsuits, because consumers bought cars which may not have met the criteria the carmaker promised.

VW's own dealers are also angry. "Yet again we have to compensate the customer for damages that actually originated in Wolfsburg," said one car seller in southern Germany.

Internal VW documents show that almost 17,000 VW test vehicles were brought to market, Spiegel reported, but VW only confirmed the recall of 6,700 cars. Only VW test autos were sold, not those from the carmaker’s other brands, such as Audi, Porsche or Skoda.

Stefan Menzel writes about the auto industry focusing on Volkswagen. Martin Murphy covers the steel, car and defense industries for Handelsblatt. Dietmar Neuerer covers domestic politics for Handelsblatt from Berlin. Volker Votsmeier is an investigative reporter with Handelsblatt. To contact the authors: [email protected], [email protected], [email protected] and [email protected]