Long story short, German cars allow the speedometer to read fast by a tenth of true speed plus 4 kph but never slow. The error may be higher or lower depending on wheel/tire sizes. In some mk5 cars the error was over 10% fast which I think is way too fast.
From car and driver :"US manufacturers voluntarily follow the standard set by the Society of Automotive Engineers, J1226...manufacturers are afforded the latitude to aim for within plus-or-minus two percent of absolute accuracy or to introduce bias to read high on a sliding scale of from minus-one to plus-three percent at low speeds to zero to plus-four percent above 55 mph. And those percentages are not of actual speed but rather a percentage of the total speed range indicated on the dial. So the four-percent allowable range on an 85-mph speedometer is 3.4 mph, and the acceptable range on a 150-mph speedometer is 6.0 mph...The European regulation, ECE-R 39, is more concise, stating essentially that the speed indicated must never be lower than the true speed or higher by more than one-tenth of true speed plus four kilometers per hour (79.5 mph at a true 70). Never low. Not even if somebody swaps a big set of 285/35R-18s for stock 255/45R-16s."
To fix this, you can recode the instrument cluster using VCDS software to use a different distance impulse number. Unlike earlier cars, there is no speedometer sensor on the transmission. Mk5 and newer cars (Jetta and Golf) read the speedometer signal from the ABS sensor on the wheels. Each revolution has 8 impulses and the car's computer uses the distance impulse number to guess the distance traveled. Adjusting this number will increase or decrease the odometer the same percent as the speedometer.
However, the speedometer and odometer readings don't have the same error. In other words, even though your speedometer is fast the odometer is usually correct. If the odometer read fast VW could be sued for cheating people by shortening the factory warranty (has happened in the past with various car makes). If the speedometer read slow VW could be partially responsible for your speeding ticket.
There were a few early mk5 North American cars with instrument clusters mistakenly coded as European but most of these were fixed. See this TSB in .pdf format for more details: European coding change TSB.
Variance in wheel sizes, tire inflation, wear, and sizes can change the speedometer and odometer readings by changing the rolling diameter. Take this into account when considering the speedometer and/or odometer error. See 1000q: wheel/tire calculator to see some examples.
Lastly, you could always just remove the speedometer needle, turn it counterclockwise a hair, and press it back on. Take a look at 1000q: instrument cluster removal for DIY instructions. If you have a mk6 Jetta, see 1000q: mk6 Jetta cluster removal. This way both your speedometer and odometer would be correct for the most common driving speeds - if you move the speedometer needle you're moving it a fixed number instead of a percent. Depending on how far you move it, it could result in a slightly slow speedometer needle at lower speeds.
VCDS cable and software from ross tech
NOTE - GPS are pretty accurate driving on a straight and level road at a constant speed so under those conditions, I'll call the speed displayed on the GPS "actual speed." What the speedometer or climatronic shows is "indicated speed".
First determine how fast your speedometer is reading. The easiest way is to find a flat stretch of road with a handheld GPS to measure actual speed. While not as accurate, you could also note mile markers over a long, straight road and divide by elapsed time. If you have dual zone automatic climate control, access the menu to show speed. If you don't have dual zone auto climatronic, you cannot access this menu. See 1000q: climatronic menu for more details. The climatronic speed may be different because of how the speedometer displays speed. Later cars with the highline instrument cluster (full screen w/convenience menu options) have the option to show the speedometer in the multifunction display.
To change the speedometer/climatronic speed, change the distance impulse number.
While stopped, plug the VCDS cable into the obd2 port and start the
software. Click on "17-Instruments".
Click on "Coding - 07". The part number below is from a 2006
Jetta TDI. If you have the same part number (VAG number), use the
procedure below. If you have a 2009 or newer, use that procedure.
The highlighted code in the picture below is the instrument cluster code. Change the last digit, the distance impulse number (in this case 4), to 1-7. Because the digit and the distance impulse number are different, refer to the helper screen that pops up. 4 is the lowest because it represents a distance impulse number of 21848, then 3=21960, then 2, then 1, then 5, then 6, with 7 as the highest.
My speedometer was reading about
10% fast so I changed the last digit from 4 to the maximum distance impulse
number which is 7. Click "Do
It!". It should say that the code was accepted. Double check
that it's still there. You should also see the new code in the screen
above. The final result was a speedometer that only read 1 dash, or about
2.5 mph faster than actual speed.
After I upsized the tires and wheels, I had to change it back to 4.
Volkswagen changed the electronics modules in later models. 2009 or 2010 definitely use the procedure below. If you have this controller part number (VAG number), use the procedure below.
One person said that changing the impulse number changed their instrument
cluster language to German. This shouldn't happen but if it does, just go
through the MFD menu Sprache and change it back to English.
Click on coding. Then click on "Long Coding
Click the drop box. Increase or decrease the distance impulse number to adjust the speedometer.
When you're done, exit the long coding helper. The new code should be
automatically in the box. If it's not, go back and copy/paste it.
Click "Do It!" to enter the code. VCDS should say if the code
was accepted. Do not copy the codes here because they are for the demo car's
settings, equipment, and module part number only! VCDS software will
adjust the code based on your car's equipment and settings as you use it.
Did it work? If you couldn't fix the Volkswagen speedometer from reading fast, please post a comment in the myturbodiesel.com forums, thank you!