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Moody’s downgrades Volkswagen due to emissions scandal

Although VW headquarters in Germany came out swinging against the U.S. EPA’s contention that its 3.0-liter TDI diesel engines contained illegal emission software, Porsche’s US arm suspended sales of its Cayenne Diesel on Tuesday.

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VW previously admitted that up to 11 million diesel vehicles were equipped with software that allowed them to pass emissions tests by temporarily lowering pollution levels, only to turn this software off during normal operation.

VOLKSWAGEN said on Tuesday it found data “inconsistencies” on carbon dioxide emissions for 800,000 more cars, the latest sign of trouble for Europe’s biggest automaker, already reeling from an emissions scandal. Vehicles such as the 2013 Audi Q7, the 2014-2015 Audi A6, A7, A8, Q5 and Q7 all contain the said engine.

He said around a quarter of the 800,000 vehicles Volkswagen has said are affected by the latest irregularities are on German roads.

Volkswagen’s emissions-cheating scandal continues to grow even in the wake of massive diesel vehicle recalls.

October 2: Volkswagen starts offering customers online checks to see if their cars are affected.

Volkswagen is voluntarily stopping the sale of a few new and used Volkswagen brand and Audi diesels in North America as it works to resolve new allegations from the Environmental Protection Agency.

September 29: Volkswagen says it has commissioned an external investigation by US law firm Jones Day. “This development nevertheless extends and deepens the scope of the risks and costs facing the company, beyond the manipulation of nitrogen oxide emissions in diesel engines, and demonstrates the wide-ranging negative credit consequences facing the company”, S&P said in a news release. But this week, the USA government accused Volkswagen of cheating on six-cylinder diesels in Volkswagen, Audi and Porsche cars and SUVs. By European Union rules, Germany’s move means that all 8 million such cars are obliged to be recalled across the 28-country bloc.

In an emailed statement, Bernd Osterloh said the company broke rules requiring it to consult with the works council before taking any such step.

Volkswagen shares closed down 9.5 percent on the Frankfurt Stock Exchange on Wednesday evening, wiping more than 3 billion euros ($3.3 billion) off its market value.

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Meanwhile, Volkswagen is recalling almost 92,000 cars in the U.S.to fix mechanical problems that can knock out the power-assisted brakes.

Germany ups pressure on VW as scandal takes on new dimension