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Automotive News Europe
November 4, 2015 06:01 CET
WASHINGTON -- Porsche Cars North America will discontinue sales of the Cayenne Diesel until further notice after the U.S. Environmental Protection Agency (EPA) said Monday that the crossover and other Volkswagen Group models powered by 3.0-liter diesel engines contained illegal software to manipulate emissions.

Porsche said it made the decision voluntarily and "in view of the unexpected U.S. EPA notice" the company received Monday.

"We are working intensively to resolve this matter as soon as possible. Customers may continue to operate their vehicles normally" Porsche said.

The agency said Monday that emissions “defeat devices” were used on the 2015 Porsche Cayenne, 2014 VW Touareg, 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, and Q5 models powered by the VW Group’s 3.0-liter diesel engine, which was developed by Audi. Previously, only vehicles with 2.0-liter diesels were involved in the automaker’s emissions scandal in the U.S.

VW Group on Monday denied the EPA’s charges, and said it would fully cooperate to resolve the issue.

About 10,000 vehicles from the 2014 and 2015 model years contained the newly discovered defeat devices, plus an unknown number of 2016 models, according to the EPA.

As of late Tuesday, Porsche was the only one of the three brands to voluntarily suspend sales of affected vehicles with 3.0-liter diesels involved in the EPA’s announcement Monday.

Neither Audi nor VW have announced similar stop sale orders in the U.S., spokespersons for the brands said in response to queries from Automotive News, a sister publication of Automotive News Europe.

Germany will retest VW cars as scandal pushes Berlin to act

November 4, 2015 19:40 CET
BERLIN (Reuters) -- Germany will retest all Volkswagen Group cars to gauge their genuine emissions levels after new revelations from the automaker pushed the government to act.

Expressing his "irritation" with VW, German Transport Minister Alexander Dobrindt said on Wednesday that all current models sold under the VW, Audi, Skoda and Seat brands - with both diesel and gasoline engines - would be tested for carbon dioxide and nitrogen dioxide emissions.

Previously the government had said it would review only nitrogen dioxide emissions from VW diesel cars.

The German government's announcement followed a VW statement on Tuesday that it had understated the level of carbon dioxide emissions in about 800,000 cars sold mainly in Europe, and consequently their fuel usage. This means affected vehicles are more expensive to drive than their buyers had been led to believe.

Dobrindt said 200,000 of the 800,000 vehicles with false CO2 and consumption values are on the road in Germany.

He said the government wanted to force VW to pay the extra car taxes which would be incurred by the higher CO2 emissions levels, but said he could not give an estimate of the size of the possible adjustment to the tax. "We expect that for these cases the car tax will need to be adjusted," he said.

The revelations added a new dimension to a crisis that had previously focused on how Europe's biggest carmaker cheated in U.S. tests on diesel cars for emissions of nitrogen oxide, which cause smog.

U.S. sales stop

As the crisis deepened, VW said it had told U.S. and Canadian dealers to stop selling recent models equipped with its 3.0-liter V6 TDI diesel engine, while the Moody's agency downgraded the firm's credit rating.

VW is Europe's biggest automaker, employing over 750,000 people in Germany, and has been a symbol of the nation's engineering prowess.

However, Dobrindt said the automaker had caused "irritation in my ministry and with me," while Chancellor Angela Merkel's spokesman said it had to take steps to prevent such a case happening again, adding: "VW has a duty to clear this up transparently and comprehensively."

The admission about fuel consumption is the first that threatens to make a serious dent in VW's sales since the scandal erupted as it could deter cost-conscious consumers, analysts said.

Tuesday's revelations, which led to Volkswagen adding 2 billion euros ($2.2 billion) to its expected costs from the scandal, are also the first time gasoline cars have been drawn into the crisis.

VW said most of the 800,000 cars affected had diesel engines such as VW's top-selling Golf, Audi's A3 hatchback and the Skoda Octavia but two models were gasoline: the VW Polo and the Audi A1, both with a 1.4-liter engine and cylinder cut-off.

Moody's said it had downgraded Volkswagen's credit rating to A3/P-2 with a negative outlook due to this revelation.

"These new claims pose further challenges to Volkswagen's financial flexibility and competitive position, and heighten Moody's concerns about Volkswagen's internal control and governance issues, thus further weakening its rating profile," said Yasmina Serghini, Moody's lead analyst for VW.

Shares in Volkswagen closed down 9.5 percent on Wednesday, wiping more than another 3 billion euros ($3.3 billion) off its market value. It has lost almost a third of its value or 24 billion euros since the scandal broke.

VW's "stop-sale" order in the United States and Canada followed a notice by the U.S. Environmental Protection Agency that VW group brands had installed illegal devices on some 3.0-liter V6 diesel models.

'Beyond a joke'

Ernst-Robert Nouvertne, who runs two Volkswagen dealerships near Cologne with VW, Audi and Skoda models, said the situation was getting "beyond a joke."

"As bad as it is, the emissions issue alone would be manageable but this [CO2 admissions] is adding a new dimension to our troubles. I hope we will get through this at some point," he said. "People have already started to rail against VW. If they start railing about our product we have a problem."

The scandal erupted on Sept. 18 when U.S. authorities exposed VW's use of "defeat devices" to cheat tests for emissions of nitrogen oxide. VW admitted such software was installed in up to 11 million diesel vehicles worldwide.

VW's latest admission came after U.S. environmental regulators said the carmaker had failed to inform them that similar devices were installed on the larger 3.0-liter engines used in luxury sport utility vehicles from Porsche and Audi - something VW has denied.

German lawyer Andreas Tilp, who filed legal action against VW last month on behalf of a private investor in the firm, said the CO2 admission gave the case "extra ammunition."

"With every widening of the scandal, the likelihood grows that a large number of people at VW had knowledge," he said.

The effects of the scandal have so far barely been reflected in VW sales figures - although it was the only German carmaker to report a decline in car registrations in Germany in October.

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