Volkswagen Scandal: What we know so far

Investigations into Volkswagen AG’s alleged manipulation of U.S. emissions tests should be widened, officials from German, France and the U.K. said Tuesday, as regulators begin to ponder whether such deception is widespread.

Calls for a broader probe came as Italy opened an investigation into the issue and a spokesman for the European Union said its regulators would soon meet with national authorities to discuss how to address the Volkswagen crisis. Concerns that the scandal could lead to broader damage for the industry hit the shares of car companies across Europe on Tuesday and those losses accelerated after Volkswagen warned that 11 million vehicles could be affected.

Shares in Volkswagen dived as much as 23% while those of Daimler AG dropped 5.5% and BMW AG slumped 5.4%. In France, Renault SA dropped 6.3% and PSA Peugeot Citroën was down 8.6%.

The French government also called for a broader probe, suggesting a European-wide examination of the auto industry. “We need to do it at the European level,” French Finance Minister Michel Sapin said Tuesday. The call was echoed by the U.K. government, which has pushing for more accurate tests at the European level for some time. “It’s vital that the public has confidence in vehicle emissions tests and I am calling for the European Commission to investigate this issue as a matter of urgency,” U.K. Transport Minister Patrick McLoughlin said in a statement. In Germany, Olaf Lies, Lower Saxony’s economy minister and a member of the Volkswagen’s supervisory board, called for a wider probe and said investigations into the scandal would have consequences for any executives found guilty of deliberate manipulation. “I am convince that everyone is going to become intensely interested in knowing whether the emissions values that have been measured are the real emissions levels,” he said. “This question will not only affect Volkswagen, but the entire public debate and will certainly play a role at other companies.”

The U.S. Environmental Protection Agency disclosed last week that Volkswagen admitted to using software in some VW and Audi diesel-powered cars to falsify the results of emissions tests. The company is now subject to an EPA and U.S. criminal investigation and could face as much as $18 billion in fines.

 

Volkswagen said Tuesday that the discrepancies only related to vehicles with a particular type of engine and that it was working to eliminate deviations between bench test results and actual road use. The U.S. Justice Department’s Environment and Natural Resources Division has begun an investigation into the alleged cheating, people familiar with the matter said. The U.S. House oversight and investigations subcommittee on Monday said it planned to hold a hearing in coming weeks. The U.S. scandal shocked Germany, where every seventh job is linked to the auto industry, and swept up rival car makers in its wake. “We are worried that the justifiably excellent reputation of the German car industry and especially Volkswagen will suffer,” Sigmar Gabriel, Germany’s economy minister and vice chancellor, said Monday.

Herbert Diess, head of Volkswagen’s passenger-car brand, canceled plans to attend a New York event on Monday for the company’s new Passat sedan, a spokeswoman said. In Germany, the scandal pushed Europe’s refugee crisis from the top spot on TV news and the government launched an independent probe of Volkswagen’s diesel-powered cars in that country. “We are facing a case of blatant consumer deception and environmental damage. I expect VW to reveal, without any gaps, how and to what extent these manipulations have taken place,” said Jochen Flasbarth, Germany’s deputy environment minister.

The European Commission, which has fought the region’s auto lobby for greater restrictions on diesel engine emissions, said it contacted Volkswagen management and U.S. authorities, but added it was too soon to launch an investigation of its own. A European Union spokeswoman said Tuesday that “there will be a meeting very soon to discuss what can be done.” The spokeswoman stressed that while the EU has a role in defining emission limits for cars, national authorities are responsible for enforcing those limits and the associated test procedures. “That is a matter for the member states, who have all the tools they need,” she said. “We are there to provide the necessary political impulses.”

The manipulation of routine emissions inspections of diesel engines could encourage tougher European Union legislation on diesel, analysts said.

Elsewhere, Italy opened an investigation into Volkswagen’s emissions, with the country’s Infrastructure and Transport Ministry requesting information from both Volkswagen and Germany’s Federal Motor Transport Authority, which approves vehicles both for the domestic market as well as other European countries. “The ministry is asking to know if the offense that occurred in the U.S., where there are different approval rules, was carried out also on approvals done by the German authority for Europe and if the vehicles were sold in Italy,” the Italian ministry said in a statement.

Sweden’s transport authority said it would send “a request for more information” to Volkswagen following the U.S investigation to “sort out all the facts” because U.S and European emissions test differ in several ways.

Investigations into the issue also stretched to Asia. In Seoul, an official at the Ministry of Environment said the South Korean government plans to conduct emissions tests in mid-October on three VW models—the Golf, Jetta and Audi A3 sedan—and would issue a recall order if the car maker is found to have cheated on air-pollution standards there. A Volkswagen Korea representative declined to comment.


By: Nancy Baker | General | Jan 1 1970
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