Porsche buys 1.5 percent of VW ordinary shares from Suzuki

26 Sep 2015 | Author: | No comments yet »

New VW CEO Mueller vows to win back trust after emission scandal.

Suzuki Motor Corp. said it sold all the shares it held in Volkswagen AG to Porsche Automobil Holding SE, following the end of a four-year dispute over a failed partnership with VW. Volkswagen AG’s new chief executive officer, Matthias Mueller, said he’ll do what it takes to overcome the worst crisis engulfing the German carmaker after revelations of cheating on emissions tests.

The Japanese carmaker will book a 36.7 billion yen ($304.3 million) one-time gain for the July-to-September quarter from the sale, the Hamamatsu-based company said Saturday in a statement filed to the Tokyo Stock Exchange. The supervisory board emerged from a seven-hour meeting on Friday to present Mueller as the successor to Martin Winterkorn, who quit on Wednesday as the scandal reverberated around the globe and the company lost more than 20 billion euros ($22.4 billion) in market value in two days. Environmental Protection Agency earlier this month, VW is said to have installed sophisticated software known as “defeat devices” that only turned on full emissions controls when it sensed official testing taking place, but otherwise emitted 10 to 40 times the legal amount while on the road.

Suzuki sold the 4.397 million Volkswagen shares for an undisclosed amount, and will disclose a revised earnings outlook if it sees the need, the statement said. A day after longtime CEO Martin Winterkorn resigned over the scandal, a member of Volkswagen’s supervisory board said he expects more executives to step down. Porsche sees the purchase of the shares, equal to a 1.5 percent stake, “as a clear commitment to our core investment” in VW, the Stuttgart, Germany-based company said in a separate statement Saturday. The company said irregularities involve a diesel engine installed in 11 million vehicles around the world, and said fixing its tarnished reputation with customers will be a long-term task.

Porsche chief Matthias Mueller will be named the new CEO of Volkswagen, sources revealed to Reuters, as the fallout from the German automobile manufacturer’s emissions test cheating scandal continued to expand. Signalling its commitment to a fresh start, Volkswagen signed off on a new structure, with more power moving to the regions and brands such as Audi, Skoda and Seat. The company also said it was suspending some employees and would reorganize its North America operations after admitting it had cheated on diesel auto emissions tests in the USA through a piece of software. Some employees have already been suspended with immediate effect, said interim Chairman Berthold Huber, calling the crisis a “political and moral catastrophe.” The new structure includes creating a North American group under Winfried Vahland, the head of the Skoda brand.

The European Union wants quick answers as to how Volkswagen was able to use stealth software in its vehicles so they could pass lab tests on emission pollution standards. “If we manage to achieve that then the Volkswagen Group with its innovative strength, its strong brands and above all its competent and highly motivated team has the opportunity to emerge from this crisis stronger than before”. BRITAIN: The Vehicle Certification Agency is working with automakers “to ensure that this issue is not industry-wide”, Transport Secretary Patrick McLoughlin said. Mr Mueller, 62, formerly worked as VW’s head product strategist, and is understood to have substantial backing among the company’s 20-member supervisory board. The ban came as authorities from India to Norway announced new probes, while the U.S. environmental regulator said it would test all diesel auto models.

At the same time, key decisions were made at the Wolfsburg headquarters, and Winterkorn was notorious for his involvement in every detail, from design to engineering. INDIA: The government has instructed the Automotive Research Association of India (ARAI) to inspect VW cars and see if the cars sold there were the same as in the U.S. and whether they had the same software. That level of involvement was reflected in the fact that Volkswagen executives in Germany controlled the key aspects of emissions tests whose results the carmaker now admits were faked, according to three people familiar with the company’s U.S. operations. Meanwhile, the number of investigations of the German automaker expanded again Thursday with confirmation that at least 27 USA state attorneys general have initiated a multi-state investigation of Volkswagen over its representations to consumers over their diesel vehicles.

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