Volkswagen sets aside $7.3 billion over emissions scandal
BERLIN (AP) — The crisis enveloping Volkswagen AG, the world's top-selling carmaker, escalated Tuesday as the company issued a profit warning following a stunning admission that some 11 million of its diesel vehicles worldwide were fitted with software at the center of a U.S. emissions scandal.
In a statement, the German company said it was setting aside around 6.5 billion euros ($7.3 billion) to cover the fallout from the scandal that is tarnishing VW's reputation for probity and seriously undermining its share price. There was no mention of any fines or penalties.
In the wake of its statement, VW's share price was down another 17.6 percent at 110.20 euros and near a four-year low. The fall comes on top of Monday's hefty 17 percent decline and means the company has lost an eye-watering 25 billion euros or so in just two days of frenzied trading.
The trigger to the company's market woes was last Friday's revelation from the U.S.'s Environmental Protection Agency that VW rigged nearly half a million cars to defeat U.S. smog tests.
The company then admitted that it intentionally installed software programmed to switch engines to a cleaner mode during official emissions testing. The software then switches off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit. (by GEIR MOULSON, MyWay)