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VW: 11 million diesel vehicles fitted with suspect software

Volkswagen AG says it is setting aside around 6.5 billion euros ($7.3 billion) to cover the fallout


 
 (AP Photo/Michael Probst)

(AP Photo/Michael Probst)

BERLIN — Volkswagen AG said Tuesday that some 11 million diesel vehicles worldwide were fitted with software at the centre of a U.S. emissions scandal, and that it is setting aside around 6.5 billion euros ($7.3 billion) to cover the fallout.

In the wake of the company’s statement, the share price of the world’s top-selling carmaker took another battering. In midday trading in Frankfurt, VW’s share price was down another 18.8 per cent at 108.45 euros and near a four-year low. The fall comes on top of Monday’s hefty 17 per cent decline.

The trigger to the company’s market woes was last Friday’s revelation from the U.S.’s Environmental Protection Agency that VW rigged nearly half a million cars to defeat U.S. smog tests.

The company then admitted that it intentionally installed software programmed to switch engines to a cleaner mode during official emissions testing. The software then switches off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit.

In its statement Tuesday, Volkswagen gave more details, admitting that “discrepancies” related to vehicles with Type EA 189 engines and involved some 11 million vehicles worldwide.

“A noticeable deviation between bench test results and actual road use was established solely for this type of engine,” it said. “Volkswagen is working intensely to eliminate these deviations through technical measures.”

To cover the necessary service measures and what it says are “other efforts to win back the trust of our customers,” VW said is setting aside some 6.5 billion euros in the current quarter.

That figure, it conceded, may be subject to revaluation in the light of ongoing investigations. As a result, it said 2015 earnings targets will be adjusted but didn’t specify by how much.

It added that the software is also installed in other vehicles with diesel engines but that that for the “majority of these engines the software does not have any effect.”

VW’s are not confined to the U.S., though.

South Korea said Tuesday it would investigate emission levels of Volkswagen diesel vehicles in the wake of the rigging scandal in the U.S. that’s heaped pressure on CEO Martin Winterkorn. The German government is to also conduct new emissions tests in VW’s diesel cars, while France called for a wider Europe-wide investigation into Volkswagen’s practices — and into those of French carmakers.

 


 

VW: 11 million diesel vehicles fitted with suspect software

  1. And still some people wonder why many others don’t trust corporations to have our best interests at heart.

  2. VW needs to tell the feds to pound sand, and focus on fomenting an owners revolt against big government. The workaround is a direct result of emissions policy being written absent even the slightest hint of engineering data or expertise. Emissions regs have been growing exponentially more costly, while resulting in ever shrinking reductions in emissions. The difference in tailpipe emissions between a mid-90’s vehicle and a 2015 vehicle is minute, but the cost increase associated with the difference is in the thousands of dollars per car.
    Emissions will still fall going forward even if there were no more stringent emissions requirements, due to engineering advancements, just not at the pace that the lawyers in Washington, who know about as much about engineering as I know about the breeding habits of Sasquatch, deem necessary.
    The system of automotive emissions regulation is long broken, and the best fix is to just quit inventing new regulations.

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