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Volkswagen Posts First Loss in Years Following Emissions Scandal

In the wake of the emissions scandal, the latest sales figures show Toyota has unsurprisingly regained the lead.

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As regulations and testing methods become more stringent in developed markets, diesel technology would have to advance significantly, making it as expensive to make diesel-fuelled cars as gasoline-electric hybrids.

In addition to a damaged reputation, Volkswagen also faces possible fines and legal actions stemming from last month’s revelations that the company had for years used software to cheat emissions tests on its diesel-powered cars. Instead it was on an uptick after the news hit.

Max Warburton, an analyst for Sanford C. Bernstein, was critical of the presentation, stating in a report that “VW appears to have little of note to tell us today about its diesel emissions crisis”.

The draft regulation will now be sent to the European Parliament for scrutiny.

VW also makes Audi, Porsche, SEAT and Skoda cars along with luxury Bentley and Lamborghini vehicles.

In a first step starting in September 2017, new models would be allowed to overshoot the EU’s official nitrogen oxide limit by 110 percent. EU-wide about 8.5 million vehicles are affected.

Last month VW admitted installing software created to cheat diesel emissions tests in 11 million vehicles worldwide, including nearly 1.2 million in the UK.

Volkswagen previously said it would set aside €6.5 billion to cover the cost of recalls, so upping those provisions by “only” €200 million is a rather modest escalation.

“That Volkswagen now finds itself in this current situation is something that a few might say is not so surprising”, said Yngve Slyngstad, the CEO of Norway’s wealth fund which owns a stake in VW and has been a critic of its corporate governance.

“We see it as a positive signal that VW has pretty much kept the provision (of €6.7 billion) for the scandal unchanged”, London-based analyst Arndt Ellinghorst at Evercore ISI said.

“We will do everything in our power to win back the trust we have lost”, vowed Mueller. Volkswagen itself is now looking closer at long-range plug-in hybrids and electric vehicles as it seeks to put the scandal behind it.

Volkswagen United Kingdom managing director Paul Willis said the firm has started writing to those customers. Alongside this, the VW boss stated that the company would examine the portfolio of more than 300 models made by the group’s brands and “examine the contribution that each one makes to our earnings”, while the board of management is said to be focusing on addressing “cross-brand strategies”.

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It emerged on Tuesday that the Serious Fraud Office (SFO) is assessing whether to launch an investigation against VW. “We understand they are looking at it”.

Volkswagen lowers profit forecast in wake of diesel scandal