Friday 20 January 2017

Billions wiped off Volkswagen stock after emission tests scandal

Andreas Cremer and Valerie Volcovici

Published 22/09/2015 | 02:30

The production line is seen the Volkswagen auto plant in Wolfsburg, in this file photo taken March 3, 2015. U.S. and California environmental regulators said on Friday they are investigating whether Volkswagen AG deliberately circumvented clean air rules on diesel cars. REUTERS/Fabian Bimmer/Files
The production line is seen the Volkswagen auto plant in Wolfsburg, in this file photo taken March 3, 2015. U.S. and California environmental regulators said on Friday they are investigating whether Volkswagen AG deliberately circumvented clean air rules on diesel cars. REUTERS/Fabian Bimmer/Files
Volkswagen CEO Martin Winterkorn gives his closing speech during the Volkswagen group night ahead of the Frankfurt Motor Show (IAA) in Frankfurt, Germany, September 14, 2015. REUTERS/Kai Pfaffenbach

Volkswagen shares plunged more than 20pc yesterday, their biggest one-day fall, after the German carmaker admitted it had rigged emissions tests in the United States, and US authorities said they would widen their probe to other manufacturers.

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Germany, alarmed at the potential damage the scandal could inflict on its world-beating car industry, urged Volkswagen 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 (EPA) said on Friday that Europe's biggest carmaker had used software for diesel VW and Audi-branded cars that deceived regulators measuring toxic emissions and could face penalties of up to $18bn.

The EPA and California officials said yesterday they would test the use of software in diesel vehicles from other manufacturers for similar possible violations.

"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.

Germany's transport minister was due to discuss the issue with Volkswagen chief executive Martin Winterkorn, two government sources said, without elaborating.

The European Commission said it was in contact with VW and US regulators, but that it was too early to say whether any specific immediate surveillance measures were needed in Europe or whether VW vehicles in Europe were also affected.

"We are taking the matter very seriously and will update you on further developments," a Commission spokesman said.

Martin Winterkorn said on Sunday that he was "deeply sorry" for the breach of US rules and ordered an external investigation. "This disaster is beyond all expectations," said Ferdinand Dudenhoeffer, head of the Center of Automotive Research at the University of Duisburg-Essen.

Analysts said it was unclear whether other automakers had also broken rules or what the ultimate cost could be for VW.

However, 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.

Mr Winterkorn, who recently saw off a challenge to his authority with the ousting of long-time chairman Ferdinand Piech, ran the VW brand between 2007 and 2015.

Evidence of increased toxic emissions emerged in 2014, prompting the Californian Air Resources Board (CARB) to investigate.

VW shares were down 18.8pc at €131.8, after hitting a three-year low of €125.4. (Reuters)

Irish Independent

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