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German carmakers 'planning huge recall' VW more than doubles emissions costs to €16.2bn
(about 1 hour later)
Several German carmakers plan to recall more than 600,000 cars as part of the widening investigations into emissions, according to reports in Germany. Volkswagen has more than doubled its provisions for the diesel emissions scandal to €16.2bn (£12.6bn).
Government sources have said that Mercedes, Opel and Porsche as well as Volkswagen and Audi would recall some diesel vehicles. Last year it told shareholders that €6.7bn had been set aside for potential costs or recalls.
The move comes after the revelation in the US last year that VW had falsified diesel emissions tests. The huge charge pushed VW to a pre-tax loss of €1.3bn for 2015, compared with a profit of €14.7bn for the previous year.
The VW board was meeting on Friday to discuss further developments. The car maker expected group sales to fall by up to 5% in 2016.
Volkswagen told shareholders last year it had set aside $7.3bn for potential costs of recalls or fines, but that figure could rise substantially. The company faces as much as $20bn in fines for breaching the US Clean Air Act alone. Chief financial officer Frank Witter said clarifying the emissions "issue" would dominate the company's agenda this year.
On Thursday, a US court disclosed details of a deal between VW and the US Department of Justice that will involve buybacks and "substantial" compensation for more than 500,000 American car buyers. "We are again operating in an exceedingly challenging environment in which global demand for new vehicles is declining, exchange rates and interest rates remain highly volatile and competition in many of our markets is intensifying," he said.
However, he was confident that the company would make "good progress on its chosen path".
On Thursday, a US court disclosed details of a deal between VW and the US Department of Justice for more than 500,000 American owners of its diesel cars affected by the emissions cheating.
The deal will involve buybacks and "substantial" compensation for owners of mostly two-litre vehicles.
UK questionsUK questions
The deal covers mostly two-litre vehicles. US district court Judge Charles Breyer said he expects an agreement between VW and regulators covering about 90,000 larger vehicles and SUVs to be addressed "expeditiously". Final details of the packages offered will be announced in June. US district court Judge Charles Breyer said he expects an agreement between VW and regulators covering about 90,000 larger vehicles and SUVs to be addressed "expeditiously". Final details of the packages offered will be announced in June.
Transport Secretary Patrick McLoughlin has asked Volkswagen why it was offering compensation to customers affected by the diesel emissions scandal in the US but not the UK.Transport Secretary Patrick McLoughlin has asked Volkswagen why it was offering compensation to customers affected by the diesel emissions scandal in the US but not the UK.
VW reaches US deal in emissions scandalVW reaches US deal in emissions scandal
Peugeot raided by emissions investigatorsPeugeot raided by emissions investigators
A Downing Street spokeswoman said: "We expect VW to treat its UK customers fairly and to adequately address their concerns. The Transport Secretary has pressed VW on the specific issue of this discrepancy of compensation."A Downing Street spokeswoman said: "We expect VW to treat its UK customers fairly and to adequately address their concerns. The Transport Secretary has pressed VW on the specific issue of this discrepancy of compensation."
Meanwhile, Daimler shares have fallen 6% in Frankfurt after the carmaker said it had begun an internal investigation into its diesel emissions testing. Several German carmakers plan to recall more than 600,000 cars as part of the widening investigations into emissions, according to reports in Germany.
Government sources have said that Mercedes, Opel and Porsche as well as Volkswagen and Audi would recall some diesel vehicles.
Daimler shares fell 4.8% in Frankfurt on Friday after the carmaker said it had begun an internal investigation into its diesel emissions testing.
The owner of the Mercedes-Benz brand said it was conducting the probe at the request of the US Justice Department.The owner of the Mercedes-Benz brand said it was conducting the probe at the request of the US Justice Department.