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New VW woes as scandal hits Porsche

Tuesday, November 03, 2015 - 01:39

Shares in Volkswagen dropped by as much as 5 percent after U.S. regulators widen their accusations of emissions test cheating against the German carmaker. As Ciara Lee reports the probe now includes larger diesel engines used in high-end models, including Porsche which the new VW CEO used to run.

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They're Volkswagen's highest-end brands - now they too have been dragged in to the company's emissions scandal. The U.S. Environmental Protection Authority is expanding its investigation to include some Audi and Porsche diesel cars. The focus is on the 3-litre engines used mostly in more expensive models. Shares in VW fell a further five percent on the news. Panmure Gordon's Simon French. (SOUNDBITE) (English) SIMON FRENCH, CHIEF ECONOMIST, PANMURE GORDON, SAYING: "The golden rule in these scandals is to get it all out on the table in the first hit. And not it come out in instalments. And that's the risk that investors are having to deal with this morning." VW admitted in September that it installed so-called "defeat devices" in 11 million cars worldwide. But the firm took issue with the new findings saying "no software was installed to alter emissions in a forbidden manner." (SOUNDBITE) (English) SIMON FRENCH, CHIEF ECONOMIST, PANMURE GORDON, SAYING: "What the Volkswagen leadership must do is assure investors that actually this is an isolated incident. That they are able to quickly quantify the amount of repayments and litigation that they will be liable for, and then move forward." The latest revelations are a particular problem for the new CEO - Matthias Mueller used to run Porsche. Mike Ingram is from BGC Partners. (SOUNDBITE) MARKET STRATEGIST AT BGC PARTNERS, MIKE INGRAM, SAYING: "At the time that Matthias Mueller took over as CEO at Volkswagen last month, he actually said the troubles facing the company might be life threatening. And if you look at the numbers involved, you can see how that might be the case." The scandal has rocked the golden image of "brand Germany". But it doesn't seem to be hurting VW's rivals. BMW posted a surprise increase in third-quarter operating profit thanks to strong sales in core European markets.

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New VW woes as scandal hits Porsche

Tuesday, November 03, 2015 - 01:39