China’s quality watchdog said yesterday it was “highly concerned” about the mechanism in Volkswagen AG’s diesel cars designed to trick emissions tests and would take appropriate follow-up measures.
The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) did not specify what action it would take beyond demanding that the problem be addressed as soon as possible. In a separate statement, the environment ministry also said it would launch an investigation into VW vehicles.
China is the world’s largest auto market, and even though few diesel passenger cars are sold there, analysts said the scandal may impact the purchasing decisions of Chinese consumers.
“I have so far seen little impact on consumers’ confidence and trust in the VW brand [in China], but we need to continue to monitor that,” said Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight.
“Their sales are already weak this year thanks to the slowdown in China’s general economy. If VW sales took a further beating from the current emissions scandal, that would further complicate their position globally following the scandal,” he added.
AQSIQ said Volkswagen would recall 1,950 imported cars in China, predominantly imported Tiguan SUVs, with the software that gives misleading emissions results in laboratory tests.
Volkswagen’s two Chinese joint ventures that produce cars domestically said last month the software that skirts emissions tests does not affect their cars.
China is the latest in a string of countries that have launched investigations into VW cars since the scandal first erupted in the US last month.
On Monday, Singapore’s environment agency said the emissions mechanism affected 650 cars and that it had suspended approvals for VW diesel vehicles until the company has fixed the problem.
Volkswagen set aside €6.5 billion in the third quarter to cover servicing and marketing outlays related to the scandal, which could contribute to an annual loss for the VW brand this year.
The European Investment Bank will examine whether VW used any loans from the EU to cheat on emissions tests for diesel vehicles
Volkswagen’s woes are far from over. The European Investment Bank (EIB) said it would will examine whether the company used any loans from the EU to cheat on emissions tests for diesel vehicles and could demand money back, EIB chief Werner Hoyer told a German newspaper.
“The EIB could have taken a hit [from the emissions scandal] because we have to fulfil certain climate targets with our loans,” the Sueddeutsche Zeitung quoted Hoyer as saying in a summary of an article published yesterday.
The EIB has granted loans worth around €4.6 billion to Volkswagen since 1990, among other for the development of engines with lower emissions and manufacturing sites in South America, according to Sueddeutscche Zeitung.
Of that figure, around €1.8 billion are still outstanding, the paper said.
The EIB will conduct “very thorough investigations” into what VW used the funds for, Sueddeutsche quoted Hoyer as saying on the sidelines of an International Monetary Fund meeting in Lima, Peru.
If it finds that the funds were used for purposes other than intended, the EU bank will have to “ask ourselves whether we have to demand loans back”, he said.
He also said he was “very disappointed” by Volkswagen, adding the EIB’s relationship with the carmaker would be greatly damaged by the scandal.
In the meantime, it was announced that Martin Winterkorn, the former boss who quit last month, will also step down from his remaining posts at the company, the Sueddeutsche Zeitung newspaper and TV stations NDR and WDR reported, without citing their sources.
The resignations are expected in the coming days, as soon as a few remaining formalities have been dealt with, they said, adding the decision comes after the German state of Lower Saxony, VW’s second-biggest shareholder, put pressure on the former CEO.
Winterkorn is chief executive of Porsche SE, the family-owned holding company that controls a majority stake in Volkswagen, as well as chairman of VW’s flagship luxury brand Audi, trucks division Scania and the group’s newly-created Truck & Bus holding.
VW has so far said it was up to the supervisory boards of the companies in question to take any decision about Winterkorn’s future involvement.