VW's new CEO under pressure as emissions scandal hits Porsche

Tue Nov 3, 2015 6:52am EST
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By Andreas Cremer and Georgina Prodhan

BERLIN/FRANKFURT (Reuters) - Volkswagen (VOWG_p.DE: Quote) was facing fresh questions on Tuesday after U.S. regulators widened their accusations of emissions- test cheating against the German carmaker to include the luxury Porsche brand previously run by its new CEO.

The U.S. Environmental Protection Authority (EPA) said late on Monday VW used devices to rig air-pollution tests in 3.0-litre diesel engines mostly found in Audis and Porsches -- the company's biggest sources of profit.

Europe's largest carmaker had previously admitted to installing cheat software on up to 11 million vehicles worldwide with smaller diesel engines.

VW said on Monday "no software had been installed ... to alter emissions' characteristics in a forbidden manner" on the larger engines. It did not immediately respond to questions on Tuesday, saying it would only correspond in writing.

Arndt Ellinghorst, an analyst at banking advisory firm Evercore ISI, said it was worrying the new allegations had surfaced more than six weeks after VW first admitted to cheating U.S. emissions tests and launched an investigation.

"It appears that it is the EPA that has discovered this violation and not VW, raising concerns around reporting, transparency and integrity within VW," he said in a note to clients.

The biggest business crisis in VW's 78-year history has wiped as much as a third off its stock market value, forced out long-time CEO Martin Winterkorn and rocked the auto industry - a key employer and source of export income in Germany.

"Volkswagen has done a disservice to German industry," Ulrich Grillo, the head of the Federation of German industries, told a conference on Tuesday, adding the firm had an obligation to the whole industry to clear up the scandal quickly.   Continued...

The logo of German carmaker Volkswagen is seen at a dealership in Glenview, Illinois, September 24, 2015. REUTERS/Jim Young