The following is an excerpt from ANDREAS CREMER | September 22, 2015 | reuters.com |
Volkswagen AG (VOWG_p.DE) said a scandal over falsified U.S. vehicle emission tests could affect 11 million of its cars worldwide as investigations of its diesel models multiplied, heaping fresh pressure on CEO Martin Winterkorn.
Volkswagen said it would set aside 6.5 billion euros ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts' profit forecasts.
It also warned that amount could rise, saying diesel cars with so-called Type EA 189 engines built into Volkswagen models worldwide had shown a "noticeable deviation" in emission levels between testing and road use.
The crisis has sent shockwaves through Germany, with Chancellor Angela Merkel calling for "complete transparency" from a company long seen as a symbol of the country's engineering excellence.
Winterkorn was due to have his contract extended at a supervisory board meeting on Friday but is now facing questions about whether he knew about the automaker's use of software that deceived U.S. regulators measuring toxic emissions in some of its diesel cars.
"Winterkorn either knew of proceedings in the U.S. 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."
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