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Volkswagen allocates $7.2 bn to cover losses from emissions scandal | Canindia News

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Volkswagen allocates $7.2 bn to cover losses from emissions scandal

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CanIndia New Wire Service 0 comments

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Frankfurt, Sep 22 (IANS/EFE) German car manufacturer Volkswagen on Tuesday announced it will allocate 6.5 billion euros (around $7.2 billion) in the third quarter of 2015 to cover the necessary service measures of the poisonous emissions scandal in the US.

The German company explained that this amount will be provided in order to regain the trust of its clients, after admitting to having rigged gas emission figures produced by diesel-powered vehicles in the US.

Volkswagen shares which made a profit of 11 billion euros ($12.2 billion) in 2014, fell 15.7 percent by midday on Tuesday on the Frankfurt Stock Exchange, reaching 111.40 euros ($124.26) per share.

The scandal of Europe’s largest vehicle producer has also dragged down the shares of other automotive companies.

BMW shares dropped 6.1 percent to 79.25 euros ($88.40) per share; Daimler was down 6.4 percent to 66.70 euros ($74.40) per share, while tire maker Continental fell 4.7 percent to 177.10 euros ($197.55) per share.

In a statement released by Volkswagen on Tuesday, the company noted: “Volkswagen is working at full speed to clarify irregularities concerning a particular software used in diesel engines.”

The company made it clear that EU 6 diesel engines currently available in the European Union comply with legal requirements and environmental standards.

“The software in question does not affect handling, consumption or emissions.

“This gives clarity to customers and dealers,” Volkswagen added, stressing that this software is also installed in other diesel-powered vehicles, and declared that “for the majority of these engines the software does not have any effect”.

Volkswagen is expected to face a fine of $18 billion in the US, as well as the damage to their reputation.

However, experts predict that the fine might be less than expected if a settlement is reached outside court.

The company admitted that it had equipped some 482,000 cars in the US market with sophisticated software that allows cars to emit less during tests than they would while driving normally.

–IANS/EFE

pm/

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