Volkswagen Plunges 15% After U.S. Emissions Cheat Scandal

21 Sep 2015 | Author: | No comments yet »

Cheating scandal rocks Volkswagen.

The shares declined as much as 23.80 euros and were down 14 percent at 140 euros as of 9:03 a.m. in Frankfurt. WASHINGTON — Volkwagen’s (VW’s) admission that it cheated to make nearly half-a-million diesel cars appear cleaner-burning than they are leaves the German vehicle manufacturer facing billions in fines, its executives risking criminal charges and its US expansion plans in peril.

VW admitted systematically cheating on US air pollution tests for years, the Environmental Protection Agency said on Friday in citing violations that could total $18bn in fines. Volkswagen Chief Executive Officer Martin Winterkorn said on Sunday that the company is cooperating with regulatory investigators and ordered its own external investigation into the issue.

VW has struggled to gain a foothold in the world’s second-biggest car market with a strategy built in part on touting the efficiency of fun-to-drive “clean diesel” vehicles shown to be anything but. Diesel versions of the Beetle, Golf, Jetta and Passat comprise more than a quarter of the brand’s US sales and are a vital part of its strategy for meeting tougher US fuel economy standards due in coming years. During normal driving, the cars with the software — known as a “defeat device” — would pollute 10 times to 40 times the legal limits, the EPA estimated. Volkswagen peer Daimler, meanwhile, signalled it may not be subject to the same violation. “I have a rough idea of what is happening and that it does not apply to us,” Daimler chief executive Dieter Zetsche said yesterday in Hamburg. “But it is much too early to make a final statement on this,” he added.

The EPA, working with the justice department, is likely to push for a stiff fine, because there are clear violations of the law and harm to the environment, said Margo Oge, the former director of the agency’s Office of Transportation and Air Quality. Hyundai Motor Company and Kia Motors Corporation agreed last year to pay a $100 million civil penalty to resolve Clean Air Act violations based on their sale of more than 1 million vehicles that emitted more greenhouse gases than what they certified to the EPA. Lawyers familiar with automotive law say the company could face criminal exposure if prosecutors agree with the EPA’s assertion about the defeat device. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles.

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