Cheating allegations widen to Porsche
VOLKSWAGEN (VW) has rejected US Environmental Protection Agency (EPA) allegations that its cheating on diesel-emissions tests included Porsche and other larger vehicles, setting up a showdown with US regulators as it seeks to repair its battered image.
Software in 3-litre diesel engines was not installed “in a forbidden manner”, and VW is co-operating with the EPA to “clarify” its questions, the German-based company said in a statement. VW’s shares fell the most in a month.
The new investigation centres on the Porsche Cayenne and VW Touareg sport utility vehicles (SUV), as well as larger sedans and the Q5 SUV from Audi, according to the EPA. VW had previously admitted to installing a so-called defeat device in smaller vehicles from the 2009 to 2015 model years.
The conflict could have implications for Matthias Müller, VW’s chief executive, who led the Porsche brand until his appointment to the top job in the wake of the scandal. Müller, whose four-decade VW career includes overseeing product planning at the Audi division, has professed no knowledge of the emissions cheating before it was uncovered by regulators.
“Had they hired someone from outside the company to take over as chief executive, and not someone from Porsche or Audi looking to avoid these kinds of revelations, they might have saved face and come clean over the course of the last six weeks,” Max Zanan, the cofounder of consulting company Income Development Dealer Solutions Group, said.
VW dropped as much as 5.1 percent, the steepest intraday decline since October 5, in Frankfurt. The shares have fallen 33 percent since the scandal was revealed on September 18, valuing the car maker at 55.9 billion (R849.1bn).
“Expansions of sales sanctions on affected models is now likely to be increased, and the possibility of leniency from the EPA is now reduced,” Alexander Haissl, an analyst at Credit Suisse, said in a note to clients. “This could impact the company’s credibility.”
The EPA and the California Air Resources Board announced on September 18 that they were investigating VW after the car maker admitted to rigging emissions systems of diesel vehicles so they would pass pollution tests. Software designed to give false results in laboratory checks is installed in 1.2-, 1.6- and 2-litre engines. The car maker says almost 500 000 vehicles in the US, and 11 million worldwide, use the motors.
VW plans to begin recalls in 2016, and has said software tweaks will be enough to make the 1.2- and 2-litre models compliant with emissions rules, while the 1.6-litre version will require other equipment. The car maker has said repeatedly that no other engines have the defeat device installed, particularly those meeting EU6 emissions standards. – Bloomberg