VW scandal spreads to 3-litre engines
VOLKSWAGEN on Tuesday said it had understated the fuel consumption of 800 000 cars sold in Europe, while majority stakeholder Porsche warned that VW’s latest findings could further weigh on its results.
The latest revelation about fuel economy and carbon dioxide emissions, which Germany’s largest automaker said represented a roughly 2-billion euro (R30.3-billion) economic risk, deepened the crisis at VW.
The scandal initially centered on software on up to 11 million diesel vehicles worldwide that VW admitted vastly understated their actual emissions of smog-causing pollutant nitrogen oxide.
US environmental regulators said on Monday that similar “defeat devices” were installed on larger 3-litre engines used in luxury sport utility vehicles from Porsche and Audi, although VW has denied those allegations.
Porsche’s North American unit said it was discontinuing sales of Porsche Cayenne diesel sport utility vehicles until further notice, citing the allegations.
“VW is leaving us all speechless,” said Arndt Ellinghorst of banking advisory firm Evercore ISI. “It seems to us that this is another issue triggered by VW’s internal investigation and potentially related to Europe.”
The carmaker said it would immediately start talking to “responsible authorities” about what to do about the latest findings.
“From the very start I have pushed hard for the relentless and comprehensive clarification of events,” Volkswagen Chief Executive Matthias Mueller said in a statement. “We will stop at nothing and nobody. This is a painful process but it is our only alternative.”
The biggest business crisis in VW’s 78year history has wiped as much as a third off its stock market value, forced out long-time CEO Martin Winterkorn and rocked the auto industry, a key employer and source of export income in Germany.
German Chancellor Angela Merkel and the European Commission, the European Union’s executive body, called for clarity and transparency to clean up the scandal.
VW’s supervisory board said it is “deeply concerned by the discovery of the irregularities” involving CO2 levels, and will meet in the “very near future” on the issue.
In the United States, Mary Nichols, chair of the California Air Resources Board, which tested Volkswagen’s diesel engines, told Reuters on
Tuesday that the regulator will likely investigate the company’s gas engines in California in wake of discovering the irregularities out of Europe.
“The issue is the CO2 from all their fleet, not just from diesel vehicles, and I think we probably will have to go back and look at what they’ve been reporting,” she said in Los Angeles.
VW took a 6.7 billion euro hit in its thirdquarter results to cover initial costs related to the scandal. Some analysts have said the final bill could reach as much as 35 billion euros in regulatory fines, lawsuits and vehicle refits.
Audi said on Tuesday it had not installed defeat devices in its 3-liter V6 diesel engines and is aiming to meet with California regulators in the next week to explain its position as well as how the software works.
Seeking belated authorisation of the software could be one option to try to solve the matter, the spokesman said. - Reuters