VW crashes as emissions fallout spreads
THE shares of Volkswagen plunged nearly 20% yesterday after the German car manufacturer admitted it had rigged emissions tests of dieselpowered vehicles in the US, and US authorities said they would widen their probe to other car makers.
German officials, alarmed at the potential damage the scandal could inflict on its car industry, urged VW to fully clear up the matter and said it would investigate whether emissions data had also been falsified in Europe.
The US Environmental Protection Agency on Friday said the world’s biggest car manufacturer by sales used software for diesel VW and Audi branded cars that deceived regulators measuring toxic emissions and could face penalties of up to $18bn.
The agency and California officials said yesterday they would test the use of software in diesel vehicles from other manufacturers for similar possible violations.
Car manufacturers including General Motors and Fiat Chrysler sell diesel vehicles and sports utility vehicles in the US.
“You will understand that we are worried that the justifiably excellent reputation of the German car industry and in particular that of Volkswagen suffers,” German Economy Minister Sigmar Gabriel said.
VW shares fell 18.6% to close at €132.20, wiping some €14bn off its market cap.
Shares in Porsche, a holding company that controls 51% of VW’s common stock, also plunged about 20%, while the European autos index was down 4.1%.
Germany’s transport minister was due to discuss the issue with VW CEO Martin Winterkorn yesterday, government sources said. Dr Winterkorn on Sunday said he was “deeply sorry” for the breach of US rules and ordered an investigation.
People including a VW supervisory board member said Dr
Winterkorn might have to resign.
“This disaster is beyond all expectations,” said Ferdinand Dudenhoeffer, head of the Centre of Automotive Research at the University of Duisburg-Essen. Rivals Daimler and BMW said the accusations made by US authorities against VW did not apply to them.
Industry experts predicted the scandal would hit VW hard, just as it was hoping to move on from a damaging leadership battle, with a supervisory board meeting on Friday due to discuss a new company structure and management line-up.
Dr Winterkorn, who saw off a challenge to his authority with the ousting of long-time chairman Ferdinand Piech, has run the VW brand since 2007, including the six-year period when some of its models were found violating US clean-air rules.
Evidence of increased toxic emissions at VW first emerged last year, prompting the California Air Resources Board to start investigating VW, a letter by the board to VW showed.
The Californian board told VW in July that its own testing of vehicles still showed excessive nitrogen oxide emissions, leading VW to admit that it had used a “defeat device” to temporarily lower emissions when it detected that it was being inspected.