Don't be fooled by VW's scandal smokescreen

First Audi, then Volkswagen: their withdrawals from the World Endurance Championship and World Rally Championship respectively certainly sent shockwaves not only through the FIA's premier non-Formula 1 series, but through global motorsport, for, between them, the championships reach all inhabited continents save Africa.

That VW Group would realign its international motorsport activities was not unexpected, for the company, arguably the world's number one depending upon metric, continues to reel under the strain of 'dieselgate', and has done so since the scandal was revealed in September 2015.

Indeed, many were surprised that Audi continued with its WEC programme, albeit cutting back its Le Mans 24 Hours entry to two cars, while VW's rally programme was also in the spotlight on account of the brand's domination - never good for business, as Mercedes is gradually discovering in F1 - and the resultant diminishing returns in the face of increasing cynicism created by the emission scandal.

VW motorsport director Jost Capito confirming his (ultimately delayed) departure for McLaren within four months of dieselgate may be pure coincidence, but, as is so often the case in motorsport, if it walks like a duck and quacks like duck the odds are strong it ain't a peacock. Either way, the suave German is too canny to spill whatever beans there may be, saying only that VW was generous to end his contract early.

The exit of two major brands from two major championships - plus the decision by Porsche, collaterally affected by the fall-out, to reduce its Le Mans entry to two cars this year - has been conveniently blamed on dieselgate, and therefore international motorsport continues glibly on its myopic way by believing that all is, in fact, rosy in the fossil fuel garden, and that some naughty engineers are to blame for the pullouts.

Denialists further point out that a diesel/hybrid production car does not feature in Audi's line-up, and so the company found it difficult to market road relevance, but this argument overlooks the fact that its LMP1 cars raced under the e-tron brand: Audispeak for hybrids, and the future moniker for its electric cars.

Such denialists seek solace in the fact that Audi continues in the DTM, but that remains a largely domestic championship supported only by Germany's three prestige brands, and any Audi withdrawal from its equal partnership in ITR e.V (the series' sporting club) and ITR GmbH (the commercial wing) would have killed the championship through the number of manufacturers being reduced to two.

As it is, though, the trio of entrants agreed to cut the number of entries per manufacturer from eight (24-car grid) to six (18) from 2017, a decision taken, according to an ITR insider, earlier this year on a cost:benefit basis. The number of cars would have been reduced to 12 had Audi withdrawn, precipitating a collapse of Germany's premier series - the last thing Audi bosses would wish for.

Equally, denialists point out that VW's WRC cars are petrol-powered, and so not directly affected by diesel shenanigans. Then there is the monetary angle: with massive fines looming (talk is of upwards of an eventual £25billion when all is said and done) VW Group needs to cut costs, but given the net cost of both programmes is less than £150million against global sales of 10 million units annually, that is but a drop in the ocean.

Not content with further muddying the already murky waters, these denialists insist that Audi withdrew from motorsport after being beaten fairly and squarely by Porsche (and Toyota) this year - true, but that fails to take into account the balance-of-performances indices in WEC, which, with a bit of tinkering, could readily tip results the other way, as they have in the past.

They retort that VW withdrew from rallying having achieved its objectives by scoring monumental successes, but why, then, did the company go to the time, effort and costs of building a state-of-art 2017 WRC Polo that some pundits reckon would have enabled VW to (easily) continue on its dominant ways?

The fact of the matter is that motorsport, more particularly combustion-engined competition, formed a part - a major part, yes, but still only a part - of VW Group's marketing mix, and it is motorsport activities that have been canned, not the entire marketing department. All this points to a belief within VW Group that marketing through motorsport is no longer relevant by conveying inappropriate messages.

VW Group sponsorship in other events/activities continues, as do above- and below-the-line activities and advertising, the latter no longer expected to cross-reference the WEC and Le Mans for obvious reasons. Ditto Lada, which will still market actively in those territories in which it is active, but, again, advertising themes will likely steer clear of motorsport activities as it departs the World Touring Car Championship.

Nor will VW's Research and Development stop - and forget not that a large part of the justification for going motor racing/rallying is the technical challenge presented by pushing cars to the limit under whatever conditions. In 2015 VW Group was by some margin (£12.5bn versus £7bn from Toyota) the largest R&D spender in the global motor industry, making a (justifiable) £150m spend on motorsport less than a drop.

Of this total group spend Audi, as one of the company's four (VW/Audi/SEAT/Skoda, with Porsche being an important niche filler) mainstream brands, consumed around 33%, so around £4bn, 25% of which will in future be earmarked for full electrification of its product range, plus autonomous driving and digital services.

Indeed, Audi is aiming for electric cars to account for a quarter of annual sales of 1.8 million units by 2025 as part of a strategic overhaul. That is 450,000 units yearly, or four times market leader Tesla's current throughput - with cars that typically have ranges of a maximum 250 miles, deemed to be sufficient for most uses.

Clearly, then, Audi has no need to prove its mettle with diesel-hybrids (or even petrol-hybrids) running flat-out for 24 hours. That is the point: the world and car usage have changed beyond all recognition over the past five years, yet automotive competition remains rooted in formats devised at the end of the 19th century: rough roads, gruelling trips with stops for human/mechanical replenishment, long distances and a need to prove reliability.

When 'Future Kid' wishes to travel from London to Barcelona he flies Ryanair rather than driving; to get to work he uses the tube or hails Uber. Does he care how reliably Audis circulate closed roads during a June weekend in France, or how far VW Polos yump on Ouninpohja in Finland? Times change, and VW Group recognised that - albeit with a bit of (underhanded) help from software engineers who doctored diesel emission tests.

Any wonder, then, that Audi plans to concentrate on Formula E, while supporting Mattias Ekstrom's World Rallycross exploits? While traditionalists and denialists decry the FIA's newest championships, the fact is they play to Future Kid: inner-city (or close proximity) circuits; affordable, short, sharp action; razzmatazz via glitzy support events and future technological relevance, particularly now RX is eyeing electrification.

That is a concept ideally suited to rallycross, as detailed here by Martin Leach, the former Ford of Europe president under whose watch Ford won rallies with Colin McRae, during this year's Formula E event in Paris.

In interview material unpublished at the time, Leach, a man steeped in motorsport who raced karts against such as Alain Prost but who tragically succumbed to cancer last week, explained why an all-electric WRX series could be the next big thing:

"If we look at what seems to appeal to a bored audience these days, I'll say it's something like rallycross, something where you've got the excitement of an off-road type environment, very dynamic movements of the cars and things like that, shorter races.

So the next step would be for something like an electrical rallycross series, which could be incredibly exciting."

A further advantage, said Leach, is that the format of rallycross enables crews to change battery packs without impacting on the competition - unlike, say, FE, where cars are changed midway. He also called for change in rallying to make it more relevant, adding: "You'd have to address some of the issues around the rallying format itself, because even world rallying struggles to get the audience of some other events."

Any wonder VW is pushing for an electric rallycross championship or that a 40-second clip of Kevin Eriksson passing five cars - including the Citroen of outgoing champion Petter Solberg - around the outside of Turn 1 of the German World RX round amassed over 1.2m YouTube views in less than a month?

The word is the majority of Audi Sport's engineering complement will switch full-time to Formula E in support of its Abt team partnership. This represents serious commitment, yet the overall cost is unlikely to even dent the company's total electrification R&D budget - while boosting FE enormously at a time when Audi's market competitors have entered, or are considering doing so.

It can be no coincidence that Citroen's upmarket DS brand, Jaguar and BMW are committed to Formula E, while Mercedes recently took an option on the last remaining grid slot.

"We have been watching the growth of Formula E with great interest," said Mercedes motorsport director Toto Wolff when confirming the option.

"At the current time, we are looking at all the options available in the future of motor racing, and we are very pleased with an agreement that secures us an opportunity to enter the series in season five.

"Electrification will play a major role in the future of the automotive industry - racing has always been a technology R&D platform for the motor industry, and this will make Formula E very relevant in the future."

That is the boss of the team currently dominating F1 speaking, and, against that background, it is no real surprise that the only two mainstream manufacturers to contest F1 in their own right are Mercedes and Renault.

Relatively unnoticed in all the VW noise was that Lada will be quitting the WTCC. With this series not - whether deservedly or not - on a par with the WEC and WRC, the fall-out has been muted, but the fact is that yet another manufacturer is forsaking a motorsport world championship. A fringe manufacturer on the face of it, but still a part of the Renault empire.

The French company is, of course, extremely active in FE via its double championship-winning e.dams team (co-headed by Alain Prost), so already has a foot in each camp. Indeed, Tesla, pioneer of the electric executive express is conspicuous by its absence from the series.

My colleague Gary Watkins recently suggested that Audi did the WEC and Le Mans a disservice through its choice of wording in announcing its WEC withdrawal with reference to ramped-up FE involvement. While Gary certainly has a point that the wording could have been more circumspect, even outgoing Audi Sport boss Wolfgang Ulrich, father of the diesel-hybrid, spoke of FE as being "future-orientated".

The key to motorsport's future lies in those two words: 'future orientated'. Emerging technologies have disrupted many industries, as have generational shifts. There is no doubt that, like it or not, motorsport will increasingly shift from fossil to electrification (or alternate fuels). The sport needs to adapt or it will die, as cricket adapted with its limited overs format, or rugby with 5/7-a-side games: short, sharp and affordable.

VW Group may have been forced to recognise this fact via an extremely unfortunate set of circumstances (for which certain executives may yet be called to account), but, as with the shift in motorsport, there will be no going back. Indeed, the only reason that Porsche is continuing in the WEC is that its (niche) road cars are increasingly petrol-hybrid-powered. But, its eMission executive saloon concept is all-electric.

Kudos to the FIA for recognising the need for change and introducing FE and elevating rallycross well ahead of the industry catching on. For that, the governing body should be lauded not slaughtered. Its actions mean the denialists and traditionalists will be able to continue enjoying motorsport - albeit with electric motors - for years to come.