Volkswagen hit with another €2.5bn penalty over diesel emissions scandal
Volkswagen Shares were down 3% on Friday as news of added provisions announced.
Volkswagen has added €20 billion due to new provisions to the mounting total from its diesel emissions scandal, which has already cost the dearly in finances and reputation. VW said in a statement.
“The reason is an increase in provisions relating to the buyback/retrofit program for 2.0l TDI vehicles, which is part of the settlements in North America that is proving to be far more technically complex and time consuming,”
Volkswagen shares dropped after the statement and as a result went down by 3.1 per cent to the bottom of the German blue-chip DAX index, which was up 0.2 per cent.
Since the scandal broke back in 2015 admitting to manipulating emissions tests in the United States, Volkswagen has recalled around 11 million vehicles worldwide, with about 8.5 million recalled vehicles coming from Europe. One Frankfurt-based trader. “You have to ask if this is a bottomless pit,”
That is exactly what many in the automotive industry are asking. Volkswagen said the extra provisions would be reflected in its third-quarter operating results, which are due to be published on October 27th.
Porsche SE, will also be affected as which owns a 30.8 per cent stake in Volkswagen, said the new provisions would also affect its results, but stuck to a wide range for its expected 2017 post-tax profit of between €2.1 and €3.1 billion.
Munich prosecutors arrested a former board member of Porsche in connection with the emissions scandal at Audi.
Audi admitted in November 2015, two months after parent Volkswagen’s diesel emissions scandal broke, that its 3.0 litre V6 diesel engines were fitted with an auxiliary control device deemed illegal in the United States.
Full History Check Irish & UK Check Finance Check