Volkswagen Says As Many As 11 Million Cars May Be Affected By Emissions Scandal

Posted by at 6:32 am on September 22, 2015

VolkswagonVolkswagen AG said a scandal over falsified U.S. vehicle emission tests could affect 11 million of its cars worldwide as investigations of its diesel models multiplied, heaping fresh pressure on CEO Martin Winterkorn. Volkswagen said it would set aside 6.5 billion euros ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts’ profit forecasts.

It also warned that amount could rise, saying diesel cars with so-called Type EA 189 engines built into about 11 million Volkswagen models worldwide had shown a “noticeable deviation” in emission levels between testing and road use. Volkswagen sold 10.1 million cars in all of 2014.

The Tagesspiegel newspaper, citing unidentified sources on Volkswagen’s supervisory board, said the board would decide on Friday to replace 68-year-old Winterkorn with Matthias Mueller, the head of the automaker’s Porsche sports car business. A Volkswagen spokesman denied the report. Winterkorn did not mention his future in a video message posted on the company’s website in which he repeated his apology for the scandal. But a key Winterkorn ally withheld public support for the chief executive.

“I don’t want to preempt the upcoming intense deliberations and will not comment on details or any consequences,” Stephan Weil, head of the German state of Lower Saxony, told reporters in Hanover when asked about Winterkorn’s future.

Shares in the world’s biggest carmaker plunged almost 20 percent on Monday after it admitted using software that deceived U.S. regulators measuring toxic emissions in some of its diesel cars. The stock tumbled another 20 percent to a four-year low on Tuesday after some countries in Europe and Asia said they would launch investigations themselves. Preference shares were down 19.7 percent at 106.1 euros at 1500 GMT.

At the lowest point, the declines in the preference and ordinary shares wiped more than $30 billion off the company’s market value.

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