Auto Industry
Shares in Volkswagen tanked on Wednesday, a day after the embattled
carmaker admitted to understating the amount of carbon dioxide emitted
by some of its vehicles. The news also dragged down the bluechip DAX
index.
Less than a day after Germany's largest carmaker, Volkswagen, said
an additional 800,000 of its cars were polluting the environment
more than originally believed, the company's stock lost more than 10 percent of its value.
The trading floor in Frankfurt had only been open for 10 minutes by the
time VW shares fell to 99.12 euros ($108.25), a drop of 10.7 compared to
Tuesday's closing price. By 10:30 a.m. local time, the stock was back
up at 101.5 euros per share, or 8.5 percent lower.
Germany's DAX index was up just 0.2 percent, underperforming a 1-percent
rise in European shares listed on the broader FTSEurofirst 300. BMW,
Daimler and other carmakers also saw their shares fall.
Volkswagen waited until after trading had closed on Tuesday to reveal
its findings of "irregularities" in the carbon dioxide emissions of 1.4,
1.6 and 2-liter engines of VW, Skoda, Audi and Seat vehicles.
Shares in Volkswagen tanked on Wednesday, a day after the embattled
carmaker admitted to understating the amount of carbon dioxide emitted
by some of its vehicles. The news also dragged down the bluechip DAX
index.
Less than a day after Germany's largest carmaker, Volkswagen, said
an additional 800,000 of its cars were polluting the environment
more than originally believed, the company's stock lost more than 10 percent of its value.
The trading floor in Frankfurt had only been open for 10 minutes by the time VW shares fell to 99.12 euros ($108.25), a drop of 10.7 compared to Tuesday's closing price. By 10:30 a.m. local time, the stock was back up at 101.5 euros per share, or 8.5 percent lower.
Germany's DAX index was up just 0.2 percent, underperforming a 1-percent rise in European shares listed on the broader FTSEurofirst 300. BMW, Daimler and other carmakers also saw their shares fall.
Volkswagen waited until after trading had closed on Tuesday to reveal its findings of "irregularities" in the carbon dioxide emissions of 1.4, 1.6 and 2-liter engines of VW, Skoda, Audi and Seat vehicles.
The trading floor in Frankfurt had only been open for 10 minutes by the time VW shares fell to 99.12 euros ($108.25), a drop of 10.7 compared to Tuesday's closing price. By 10:30 a.m. local time, the stock was back up at 101.5 euros per share, or 8.5 percent lower.
Germany's DAX index was up just 0.2 percent, underperforming a 1-percent rise in European shares listed on the broader FTSEurofirst 300. BMW, Daimler and other carmakers also saw their shares fall.
Volkswagen waited until after trading had closed on Tuesday to reveal its findings of "irregularities" in the carbon dioxide emissions of 1.4, 1.6 and 2-liter engines of VW, Skoda, Audi and Seat vehicles.
Yet again – more trouble for Volkswagen
The company also said at least one gasoline-powered engine was
affected, widening an already massive emissions-cheating scandal that
until late in the day on Tuesday had only centered around diesel
vehicles.
"VW is leaving us all speechless," said one banking advisor with the firm Evercore ISI, Arndt Ellinghorst.
High costs
The plummeting stock value only added to the financial woes facing
Volkswagen and its shareholders. Repairing the 800,000 cars' faulty CO2
emissions could cost the company around 2 billion euros.
That's on top of the 6.7 billion euros VW has already set aside to cover
recalls of the 11 million vehicles around the world that have software
installed that is capable of deceiving emission testers.
Volkswagen has been conducting its own investigations into the fuel
economy of its vehicles ever since US environmental regulators revealed
on September 18 that the German carmaker had been lying about the
efficiency of its cars and vans.
The company has already lost a third of its share value since the
scandal broke. Porsche Automobil Holding, which owns nearly a third of
VW's capital, has also warned that the latest news of low-balled CO2
emissions from Wolfsburg, Germany, where VW is headquartered, could
further weigh on its own results.
Porsche had already cut its full-year outlook as a result of VW's emissions-cheating.
'A disservice to German industry'
The luxury carmaker, a subsidiary of VW, also said its North American unit would
discontinue sales
of the 2014-2016 model Cayenne diesel sport utility vehicles until further notice, citing
allegations by US regulators
that "defeat devices" had been installed in Porsche and Audi models with 3.0 liter diesel engines.
Those allegations, which were leveled against Volkwagen on Monday, were
promptly denied by German auto bosses. Porsche said it had no knowledge
of any cheating software installed in its vehicles, but said it would
stop selling the models in question anyway.
Audi, another unit of VW,
claimed on Tuesday
it had not installed defeat devices in its models and had scheduled
meetings with regulators in the US state of California next week to give
answers.
The scandal engulfing VW has shaken the very foundation of Germany's
powerful auto industry, an important source of jobs at home and a major
exporter abroad.
"Volkswagen has done a disservice to German industry," Ulrich Grillo,
the head of the Federation of German Industries, told a conference in
Berlin on Tuesday.
cjc/ng (Reuters, AFP, dpa)
"VW is leaving us all speechless," said one banking advisor with the firm Evercore ISI, Arndt Ellinghorst.
High costs
The plummeting stock value only added to the financial woes facing Volkswagen and its shareholders. Repairing the 800,000 cars' faulty CO2 emissions could cost the company around 2 billion euros.
That's on top of the 6.7 billion euros VW has already set aside to cover recalls of the 11 million vehicles around the world that have software installed that is capable of deceiving emission testers.
Volkswagen has been conducting its own investigations into the fuel economy of its vehicles ever since US environmental regulators revealed on September 18 that the German carmaker had been lying about the efficiency of its cars and vans.
The company has already lost a third of its share value since the scandal broke. Porsche Automobil Holding, which owns nearly a third of VW's capital, has also warned that the latest news of low-balled CO2 emissions from Wolfsburg, Germany, where VW is headquartered, could further weigh on its own results.
Porsche had already cut its full-year outlook as a result of VW's emissions-cheating.
'A disservice to German industry'
The luxury carmaker, a subsidiary of VW, also said its North American unit would discontinue sales of the 2014-2016 model Cayenne diesel sport utility vehicles until further notice, citing allegations by US regulators that "defeat devices" had been installed in Porsche and Audi models with 3.0 liter diesel engines.
Those allegations, which were leveled against Volkwagen on Monday, were promptly denied by German auto bosses. Porsche said it had no knowledge of any cheating software installed in its vehicles, but said it would stop selling the models in question anyway.
Audi, another unit of VW, claimed on Tuesday it had not installed defeat devices in its models and had scheduled meetings with regulators in the US state of California next week to give answers.
The scandal engulfing VW has shaken the very foundation of Germany's powerful auto industry, an important source of jobs at home and a major exporter abroad.
"Volkswagen has done a disservice to German industry," Ulrich Grillo, the head of the Federation of German Industries, told a conference in Berlin on Tuesday.
cjc/ng (Reuters, AFP, dpa)
