Volkswagen cuts 2016 capital spending plan
As cheating scandal widens, company decides to cap expenditure
As cheating scandal widens, company decides to cap expenditure. PHOTO: REUTERS
WASHINGTON/WOLFSBURG:
Volkswagen AG cut €1 billion (£724.21 million) from its 2016 investment plan, as its emissions cheating scandal expanded to include tens of thousands more US vehicles.
Volkswagen has told US regulators that emissions issues in larger luxury cars and SUVs extend to an additional 75,000 vehicles dating back to 2009, the US Environmental Protection Agency said on Friday.
The disclosure widened the scandal, which had previously focused mainly on smaller-engined, mass-market cars, and raised the possibility that engineers at both the Audi and VW brands could have been involved in separate emissions schemes.
Earlier on Friday, the supervisory board of VW, Europe’s biggest auto manufacturer, said it would cap spending on property, plant and equipment at around €12 billion ($12.8 billion) next year, down about 8% on its previous plan of around €13 billion.
Volkswagen is battling the biggest business crisis in its 78-year history after admitting in September that it cheated diesel emissions tests in 482,000 2.0-liter diesel cars sold in the United States since 2009.
In November, the EPA and the California Air Resources Board also accused VW of evading emissions in at least 10,000 Audi, Porsche and VW sport utility vehicles and cars with 3.0-liter V-6 diesel engines. VW initially denied the findings.
But during a meeting on Thursday, VW and Audi officials told the EPA that all 3.0-liter diesel engines from model years 2009 through 2016 had higher emissions than allowed.
Audi spokeswoman Jeri Ward acknowledged that the 3.0-liter software at issue “meets (EPA and CARB’s) definition of a defeat device.”
The new disclosure covers a total of 85,000 vehicles, the EPA said, including the diesel Audi 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, Q5, Porsche Cayenne and Volkswagen Touraeg.
Analysts have said the scandals could cost the company €40 billion or more in fines, lawsuits and vehicle refits.
The widening scandal “slows VW’s ability to move beyond the negative headlines and start the rebuilding process,” said Karl Brauer, senior analyst at Kelley Blue Book.
“You can’t recover from a scandal while it’s still growing. You have to reach a point where everything is on the table and no more bad news is coming - then you can start repairing the damage.”
Published in The Express Tribune, November 22nd, 2015.
Volkswagen AG cut €1 billion (£724.21 million) from its 2016 investment plan, as its emissions cheating scandal expanded to include tens of thousands more US vehicles.
Volkswagen has told US regulators that emissions issues in larger luxury cars and SUVs extend to an additional 75,000 vehicles dating back to 2009, the US Environmental Protection Agency said on Friday.
The disclosure widened the scandal, which had previously focused mainly on smaller-engined, mass-market cars, and raised the possibility that engineers at both the Audi and VW brands could have been involved in separate emissions schemes.
Earlier on Friday, the supervisory board of VW, Europe’s biggest auto manufacturer, said it would cap spending on property, plant and equipment at around €12 billion ($12.8 billion) next year, down about 8% on its previous plan of around €13 billion.
Volkswagen is battling the biggest business crisis in its 78-year history after admitting in September that it cheated diesel emissions tests in 482,000 2.0-liter diesel cars sold in the United States since 2009.
In November, the EPA and the California Air Resources Board also accused VW of evading emissions in at least 10,000 Audi, Porsche and VW sport utility vehicles and cars with 3.0-liter V-6 diesel engines. VW initially denied the findings.
But during a meeting on Thursday, VW and Audi officials told the EPA that all 3.0-liter diesel engines from model years 2009 through 2016 had higher emissions than allowed.
Audi spokeswoman Jeri Ward acknowledged that the 3.0-liter software at issue “meets (EPA and CARB’s) definition of a defeat device.”
The new disclosure covers a total of 85,000 vehicles, the EPA said, including the diesel Audi 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, Q5, Porsche Cayenne and Volkswagen Touraeg.
Analysts have said the scandals could cost the company €40 billion or more in fines, lawsuits and vehicle refits.
The widening scandal “slows VW’s ability to move beyond the negative headlines and start the rebuilding process,” said Karl Brauer, senior analyst at Kelley Blue Book.
“You can’t recover from a scandal while it’s still growing. You have to reach a point where everything is on the table and no more bad news is coming - then you can start repairing the damage.”
Published in The Express Tribune, November 22nd, 2015.