Most VW engines burn a little oil. This is not usually a problem unless it's blowing blue smoke all the time. In our experience oil usage has been about one litre per 3000 miles. I occasionally get a puff of smoke on start-up, but there's no smoke trail when it's warm and the plugs stay clean. A little smoke on startup is quite common with the VW engine and with other horizontal engines.
There is always a thin film of oil on the cylinder walls, but most of it is wiped off by the oil control ring (the bottom ring) on each stroke. As an engine wears, the rings allow more oil to stay on the upper cylinder walls, and this leads to oil burning/carbon build up in the heads. Even new engines are SUPPOSED to burn a little oil, since there MUST be a thin film of oil on the cylinder walls, but it's normally only a few molecules thick. As the engine wears, the rings lose there spring (don't push on the walls so hard) and the ring-gap increases, and this allows too much oil to stay on the cylinder walls, and this is why old engines get smokey.
When the engine stops after a run, the trapped air in some of the cylinder heads (some cylinders will have both valves shut, resulting in a closed head space) cools and forms a partial vacuum in the head space, so any oil lying in the cylinder "under" the piston can be drawn up past the rings into the head area. When you start the engine, this oil gets partly burned and causes smoke, or you may see a few oil droplets thrown out the exhaust.
The fact that the cylinders are horizontal means that some oil will tend to sit on the lower side of the cylinder rather than drain completely into the sump, and of course if the car is at a slight angle (sideways) the downhill cylinders will have more oil pooling behind the pistons, allowing some oil to leak into the upper cylinders overnight, especially if the ring gaps were near the bottom. For this reason oil smoke on start-up is higher than it might otherwise be, even without the vacuum effect of the cooling head space.
But even when the car is parked on the level, there would still be a little oil left in the cylinders, resulting on a white puff on start-up. So long as it's only a few seconds of smoke there is nothing to worry about.
When rebuilding your engine, you can minimize oil burning if you can leave the cylinders/pistons alone. If you have to remove them too, then it's difficult to get everything back EXACTLY the same as it was, and since all parts wear just a little differently, you might get more leaks etc. Don't change the piston rings on their own -- they won't last very long, and will make the worn cylinder wear even more quickly. With the VW engine, you should always replace the cylinders, pistons and rings as a complete set. That way you get maximum mileage for your money. If you don't replace the cylinders, pistons and rings as a set, it's difficult to get everything back EXACTLY the same as it was, and since all parts wear just a little differently, you will begin to burn more oil.
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