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VW scandal hits Bosch - where next?

Wednesday, December 02, 2015 - 01:36

German auto supplier Bosch has been accused of conspiring with Volkswagen to evade diesel emissions standards in at least 11 million vehicles worldwide. As Ivor Bennett reports, the class action lawsuit follows a huge fall in VW sales in the U.S.

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Given the intricacies of the assembly line, it was perhaps just a matter of time before the scandal at VW went beyond the company itself. Parts coming from numerous suppliers, raising the question: who else was involved? Germany's Bosch is the first to be implicated. A class action lawsuit in the US has accused the auto supplier of building the software behind the so-called defeat device - which allowed VW to cheat emissions tests on at least 11 million vehicles worldwide. Bosch's involvement hasn't been proven, but it did supply components for seven of the affected models. The kind of relationship that could see others drawn in too, says Admiral Markets Darren Sinden. SOUNDBITE (ENGLISH) DARREN SINDEN, MARKET RESEARCH AND CLIENT RELATIONS MANAGER, ADMIRAL MARKETS, SAYING: "They've fallen foul of American law - sort of guilt by association. It could well just be a case of American prosecutors trying to make a name for themselves. Nonetheless it is something of a concern. It just shows that the scandal will run and run." Not least for Volkswagen. Despite an overall upward trend for the US market, its sales there fell by 25 percent last month. Making the bill they could face for the scandal seem even bigger. SOUNDBITE (ENGLISH) DARREN SINDEN, MARKET RESEARCH AND CLIENT RELATIONS MANAGER, ADMIRAL MARKETS, SAYING: "3,000 euros per vehicle, that's roughly, what, 33, 35 billion euros that we'd be talking about in cost for VW. And that wouldn't even cover necessarily any punitive fines or additional class actions that might result." The company originally anticipated costs of just under 7 billion euros. But seems to have realised it'll need a whole lot more. Reportedly reaching an agreement with banks for a 20 billion euro bridge loan.

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VW scandal hits Bosch - where next?

Wednesday, December 02, 2015 - 01:36