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Volkswagen Issues Stop-Sale Order on Cars with New Engines

April 10, 2014

Volkswagen of America has ordered its dealers in the United States to stop selling the newer cars with the 1.8-liter EA888 engine and automatic transmission. The company put the stop-sale order due to the risk of a transmission oil cooler leak.

“We have asked our dealers to immediately stop the sale of any affected vehicles,” said VW of America in a statement. “We will officially notify the National Highway Traffic Safety Administration as soon as possible and will be in contact with (affected) customers.”

The stop-sale order was sent to dealers on Tuesday and applies to cars built after February 1, 2014. The order covers about 25,000 2014 model year Beetle, Beetle convertible, Jetta and Passat cars, some of which were made at the VW’s Chattanooga plant in Tennessee.

According to VW, the problem with the cars is the O-ring that connects to the automatic transmission cooler. It was found to be defective. VW spokesman Scott Vazin told Automotive News that the supplier had changed the specifications of the O-ring that links the oil cooler to the transmission.

Vazin said that VW noticed a leak due to the flawed O-ring, which in certain cases, could start a fire.

VW started making the EA888, one of its most common engines, just last year in Silao, Mexico. The German automaker hoped that the engine’s fuel economy will enable the company to sell more units in the United States.

The turbocharged, four-cylinder EA888 was the base engine for the Passats built in the U.S. and Beetles made in Mexico. Some Mexican-made Jettas were also equipped with it.

According to the memo sent to dealers, there will soon be “a follow-up communication” and that the parts needed to fix the problem will be available soon.

VW has not yet issued a recall, but it is likely that the company will make an announcement after discussing the matter with the NHTSA. Many cars have already been sold, and they would need to make the fix with a new O-ring.

Recalls have been hogging the spotlight in the auto industry for a while now. General Motors has had its massive recall since February, and Toyota has recently announced a huge recall of its own. Even if VW does issue a recall due to the defective O-ring, it is less likely that the German carmaker’s sales will be affected. GM posted strong sales for March, despite the recall debacle that concerns faulty ignition switches.

The VW brand’s U.S. sales for March dropped 3 percent to 36,717 vehicles. Interestingly, the brand sold more Jetta and Passat sedans last month and enjoyed strong sales in Midwestern states where winter weather was most severe. Diesel-powered models accounted for 27 percent of the brand’s U.S. sales, according to VW of America’s Vice President of Sales Mark Barnes.

However, VW’s global sales results were better. The brand delivered 557,800 vehicles in March, a 4.8 percent increase compared to the previous year. Deliveries for the first quarter of the year totaled 1.48 million vehicles, a 3.9 percent increase over the January to March 2013 figure.

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