Volkswagen shares plunge on emissions scandal; U.S. widens probe

Mon Sep 21, 2015 7:15pm EDT
 
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By Andreas Cremer and Valerie Volcovici

BERLIN/WASHINGTON (Reuters) - Volkswagen (VOWG_p.DE: Quote) shares plunged by nearly 20 percent on Monday after the German carmaker admitted it had rigged emissions tests of diesel-powered vehicles in the United States, and U.S. authorities said they would widen the probe to other automakers.

German officials, alarmed at the potential damage the scandal could inflict on its car industry, urged Volkswagen to fully clear up the matter and said it would investigate whether emissions data had also been falsified in Europe.

"You will understand that we are worried that the justifiably excellent reputation of the German car industry and in particular that of Volkswagen suffers," German Economy Minister Sigmar Gabriel said.

The U.S. Environmental Protection Agency (EPA) said on Friday that Volkswagen, the world's biggest carmaker by sales, used software that deceived regulators measuring toxic emissions and could face penalties of up to $18 billion.

The scandal reverberated on Monday with the White House saying it was "quite concerned" about the reports of VW's conduct. The U.S. Department of Justice started a criminal probe of the effort to game the emissions tests, according to press reports.

The EPA and California officials said they would test diesel vehicles from other manufacturers for similar violations. In addition to Volkswagen, automakers including General Motors Co and Fiat Chrysler Automobiles sell diesel cars and SUVs in the United States.

EPA spokeswoman Liz Purchia said the agency would be "working closely" with the Department of Justice on the probe but she would not comment about the possibility of a criminal probe.

The alleged attempt to fool the emissions tests also attracted congressional notice, with a House of Representatives panel planning a hearing in the coming weeks.   Continued...

 
A Volkswagen Tiguan car appears in a news broadcast on a TV in front of the German share price index DAX board, at the stock exchange in Frankfurt, Germany September 21, 2015.  REUTERS/Ralph Orlowski