Volkswagen’s cumulative “costs” related to the ongoing diesel vehicle emissions cheating scandal now total around $30 billion (~€25 billion), following the company’s report that it was booking an additional €2.5 billion provision related to hardware fixes for affected vehicles in the US.
These hardware fixes are “proving tougher than expected,” a company spokesperson revealed in a statement. Before the booking of this additional provision, Volkswagen had already set aside some €22.6 billion ($26.7 billion) to cover the costs of vehicle fixes and various fines.
The public statement from a Volkswagen spokesperson read: “We have to do more with the hardware,” before going on to note that some US customers would have to wait longer than expected for hardware “fixes” (which relates to owners of 2 liter diesel cars).
“In Europe, where only a software update is required for the 8.5 million affected cars, besides a minor component integration for about 3 million of those, fixes are running smoothly, the spokesman added,” Reuters reports.
“The additional provision will be reflected in third-quarter results due on October 27, VW said. … ‘You have to ask if this is a bottomless pit,’ said one Frankfurt-based trader of the US charges.” Other investors/traders must be wondering the same.
“Asked why VW did not see the problem sooner, the spokesman said it had made provisions based on what it expected at the time. … Porsche SE, which owns a 30.8% stake in VW, said the new provision would also affect its results, but stuck to the wide range for its expected 2017 post-tax profit of €2.1–3.1 billion.”
In related news, prosecutors in Munich, Germany arrested a second suspect in relation to its investigation of emissions testing fraud at Audi on Thursday. Audi of course represents a large part of the Volkswagen Group.
Image via Jon Worth (some rights reserved)
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