Tough new tests backed — European Union auto emissions

Scandal-hit German auto giant Volkswagen AG reported yesterday its first quarterly loss in 15 years after keeping a €6.7-billion provision for liabilities related to the emission cheating in its diesel engines.

VW may be able to recover from the scandal in two to three years under a new management structure, Mueller said on October 15.

“The initial impact of the current situation is becoming clear”. Volkswagen initially earmarked EUR6.5 billion for it.

Analysts estimate that the final cost to the company could run to tens of billions of euros. “Together with the very strong net liquidity, this should reassure both equity and fixed income investors”. Ordinary shares in Volkswagen rose 1.8 percent to 124 euros in afternoon trading in Europe. That news led to a stunning series of admissions: VW sold millions of diesel-powered cars around the world with software that switches on the cars’ emission-control systems only when it determines that an emissions test is under way.

Transport Minister Alexander Dobrindt met in Washington this week with U.S. Transportation Secretary Anthony Foxx and Environmental Protection Agency Administrator Gina McCarthy.

In spite of the scandal the firm expects sales to grow in 2013. It said that full-year revenue could increase by up to 4%. The slowdown in China, Volkswagen’s biggest market, could be of particular concern because of it big contribution to Volkswagen’s profit.

Volkswagen, which has just been overtaken by Toyota as the world’s biggest carmaker in terms of sales, ran up a net loss of 1.673 billion euros ($1.86 billion) in the three-month period, compared with a profit of 2.971 billion euros ($3.30 billion) a year earlier.

Spain’s high court opened a criminal investigation Wednesday into German automaker Volkswagen over a diesel emissions scandal that affects 11 million cars worldwide.

There were few answers in the interim report. Volkswagen has called that pure speculation.

Investor confidence in VW has plummeted after it emerged in September that it had installed specialist software in a few 11m automobiles in a bid to cheat emissions tests.

Müller said the company will unveil its new strategy 2025, cornerstones of which will be announced mid-next year.

Meanwhile, throughout the USA, Volkswagen dealers are coping with the backlash of the scandal by offering steep discounts of more than $7,000 on a few of the company’s newer models including the 2015 Passat as well as 2015 and 2016 Jettas. Chief financial officer Frank Witter said: “No fees or fines [or] damages to customers are contained [in the Euro 6.7bn charge]”.