Economy

Dieselgate: VW to take another $3 bn hit; ex-official held

Dieselgate: VW to take another $3 bn hit; ex-official held”

Volkswagen's cumulative "costs" related to the ongoing diesel vehicle emissions cheating scandal now total around $30 billion (~€25 billion), following the company's report that it was booking an additional €2.5 billion provision related to hardware fixes for affected vehicles in the US.

Separately Munich prosecutors made an arrest in connection with the scandal.

At a German labour court hearing in February, Audi lawyers claimed that Ulrich Weiss, former head of diesel engine development at the carmaker, knew about the emissions manipulations but had failed to inform his superiors. He was suspended after the diesel emissions test-cheating was exposed, and then left the company.

Volkswagen previous year agreed to buy back or fix almost half a million 2.0-litre diesel cars in the USA that had been fitted with cheating software to make them seem less polluting than they were.

According to Bloomberg, Hatz was close to former VW chief executive Martin Winterkorn, who has denied any knowledge of the "defeat devices" which allowed vehicles to artificially reduce emissions during tests before their existence was exposed publicly. Before Friday, it had set aside 22.6 billion euros ($26.7 billion) to cover costs such as fines and vehicle refits.

Volkswagen today said it was setting aside another 2.5 billion euros to deal with the fallout from the "dieselgate" scandal in the United States as its efforts to recall tainted cars there proved to be more "complex" than expected.

On Saturday, a spokesman for Audi said the working relationship with Weiss "has been terminated by mutual consent".

VW, Europe's biggest automaker, admitted in September 2015 that it had used illegal software to cheat USA diesel emissions tests, sparking the biggest business crisis in its 80-year history.

BNP Paribas analyst Stuart Pearson said he has provided for another 1 billion euro charge to hit VW's fourth-quarter results because of outstanding technical fixes for the 3.0-litre Audis.

He also said the extra time needed to fix VW's 2.0-litre models meant increased depreciation of the cars being bought back, which also need to be fixed for resale.



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