Volkswagen boss issues profuse apology as shares nosedive

EU regulators in contact with VW as impact threatens European car sector

The CEO of Volkswagen US, Michael Horn, says he is confident the car manufacturer will make amends following emissions test rigging. Video: Reuters

 

Volkswagen chief executive Martin Winterkorn has issued another apology over the firm’s cheating on emissions tests. It came as the firm admitted up to 11 million of its vehicles worldwide have been fitted with software to deceive the tests.

EU regulators said they are in contact with Volkswagen and US authorities following the car-makers’ admission it had rigged emissions tests in the US for several years.

The French and German governments also announced inquiries, which will run alongside ongoing investigations by the US Justice Department and its Environmental Protection Agency.

Addressing the scandal, which is threatening to become the most serious in the company’s 78-year history Mr Winterkorn said: “I’m very sorry, I’m utterly sorry. The violations of these diesel motors by our company go against everything that Volkswagen stands for.

“I’m utterly sorry that we have damaged trust in this way. I apologise to all our clients and to the public authorities for all of the mistakes.”

“At this point, I don’t have the answers to all the questions,” he said in a video posted on the car firm’s website. “But we’re in the process of ruthlessly investigating the issue, and to that end everything will be put on the table as fast, thoroughly and transparently as possible.”

The German government opened an investigation into the scandal and Chancellor Angela Merkel said: “Considering the difficulty of the situation, there has to be full transparency and an effort to clarify the whole matter.”

Winterkorn under pressure

Despite earlier media reports suggesting he was going to announce his resignation, Mr Winterkorn remains in his position. A supervisory board is due to meet today to discuss the scandal and a full board meeting is scheduled for Friday where it is due to decide on extending Winterkorn’s contract until 2018.

In the meantime the pressure remains. “Winterkorn either knew of proceedings in the US or it was not reported to him,” Evercore ISI analyst Arndt Ellinghorst said. “In the first instance, he must step down immediately. In the second, one needs to ask why such a far-reaching violation was not reported to the top and then things will get tough too.”

VW shares continued to fall on Tuesday, down 20 per cent on the opening price and over 35 per cent since Friday’s close. About €25 billion has now been wiped off the value of Volkswagen’s shares in the two days of trading since the scandal erupted. It has also impacted on other car firms with Peugeot down 7 per cent, BMW down 5 per cent and Daimler, the owner of Mercedes-Benz, also down 5 per cent.

Rigged tests

On Friday VW revealed it used hidden software to consistently cheat on US emissions tests carried out by the US Environmental Protection Agency. Other regional authorities are now scrambling to see whether similar software was used to deceive their testing regimes.

The carmaker insisted in the statement that new diesel vehicles available in the European Union “comply with legal requirements and environmental standards”. It added: “The software in question does not affect handling, consumption or emissions. This gives clarity to customers and dealers.”

- (Additional reporting: Reuters/Bloomberg)

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