January 27, 2016 / 12:25 PM / 2 years ago

Bosch launches internal probe into emissions scandal

A Bosch Service sign is reflected in a car door while a product expert for diagnostics equipment of German auto parts supplier Robert Bosch analyses a car in a workout garage in Plochingen near Stuttgart April 15, 2013. Picture taken April 15. REUTERS/Michaela Rehle

STUTTGART (Reuters) - German auto supplier Robert Bosch [ROBG.UL] said it had launched an internal probe to investigate whether any of its staff were involved in a scandal over the rigging of automotive emissions tests that has engulfed Volkswagen (VOWG_p.DE) .

Stuttgart-based Bosch, which released preliminary full-year earnings on Wednesday, makes an engine management program used by several top automakers including VW.

VW and Bosch are both under investigation by German prosecutors and U.S. authorities who are examining what role employees of the companies may have played in designing software to help cheat U.S. emissions tests.

“The day after the allegation became public, I ordered an internal investigation,” Chief Executive Volkmar Denner said, adding the company was cooperating with authorities and could not provide further details.

Bosch is however reluctant to disclose its engine management software codes to authorities since they contain years of proprietary know-how. “Why should we disclose this,” Denner said. “What do authorities want with this? It’s so complex that it is not feasible.”

Denner said only automakers could provide real insight into potential engine management violations since they were the ones who had a complete overview of engine and exhaust systems and since they submitted cars to the authorities for certification.

Asked whether Bosch played a role in calibrating Volkswagen’s engine software, Denner said: “Powertrain is complex, many suppliers are involved.”

Rather than analyzing vehicle software, authorities should combat fraud with more stringent independent testing of vehicle emissions, he said.

Diesel technology should continue to be pushed, since combined with modern filter systems, diesel engines can help cut pollution in large cities by reducing particulate matter.

“The diesel is an air cleaning machine,” Denner said.

Dismissing diesel technology out of hand may dent consumer confidence in cars and further weigh on demand in a year when Bosch forecasts that global automobile production will grow by 1 percent rather than the 3 percent growth seen in previous years.

“2016 will not be an easy year,” Denner said.

Bosch said it continued to expect a rise in 2016 operating profit after demand for driver assistance and infotainment systems helped lift its sales and profit margin in 2015.

The industrial group, which makes household goods, engine components and sensor technologies, said its revenue rose 10 percent year-on-year to 70.6 billion euros ($76.7 billion) in 2015 thanks to a 12 percent jump in sales from its mobility solutions division to 41.7 billion euros.

Additional reporting by Edward Taylor; Editing by Maria Sheahan and Keith Weir

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