German Chancellor Angela Merkel called Tuesday for “complete transparency” from Volkswagen after the German automaker was accused by U.S. authorities of rigging its diesel cars to cheat on American emissions tests, while France called for a European investigation and Italy launched its own probe.
“I hope that the facts will be put on the table as quickly as possible,” Merkel said in Berlin.
Volkswagen acknowledged that 11 million of its cars were equipped with a software work-around that allowed the vehicles to detect if they were being tested and then temporarily reduce emissions. That allowed them to meet standards set by the U.S. Environmental Protection Agency, while spewing more pollutants into the air during normal driving conditions.
The world’s largest automaker faces potential fines of up to $18 billion in the U.S., where half a million cars are being recalled and sales of new vehicles equipped with its diesel engine have been halted.
The company’s share price has plummeted, falling by more than 34 percent on the Frankfurt bourse in the first two days of this week. The shares of other European carmakers like Mercedes, BMW, PSA Peugeot Citroën and Renault were also down, although most of them have denied that their cars were equipped with similar devices.
Volkswagen said it was downgrading its projected profit for the fourth quarter of this year by €6.5 billion to account for costs associated with the accusations.
“It is legitimate to punish if necessary” — Michel Sapin, French finance minister
The U.S. investigation has unleashed a reaction from European authorities, who are concerned that similar cheating may have been used to avoid EU emissions regulations.
The European Commission, which sets emission standards for cars sold in the bloc, said it was looking into the matter, but had not yet launched its own investigation.
“We need to clarify the facts of what happened to get to the bottom of this. It is premature for us to draw any conclusions,” said Lucia Caudet, a Commission spokeswoman. “We’re taking this very seriously.”
The EU is preparing a new battery of emissions testing that will be able to measure a car’s performance on the road and not just in a lab, Caudet said.
However, Michel Sapin, the French finance minister, demanded a European investigation into Volkswagen. “These are serious matters, and it is legitimate to punish if necessary,” Sapin told France’s Radio1.
Inquiries spread
The Italian ministry of transport is launching its own probe into whether Volkswagen cars equipped with software to skirt emissions limits were also sold in Italy.
In a letter to Germany’s Federal Motor Transport Authority, the Italian ministry expressed concern about the news and its possible repercussions on the European Union’s system for regulating and approving cars.
“The minister wants to know whether these offenses, which happened in the U.S. where there are different approval regulations, were carried out for approvals by the German authority for Europe, and whether these cars were sold in Italy,” the ministry said in a statement.
The EU lays out a framework for countries to follow when they issue certificates of compliance for cars, including emissions limits. National authorities then administer the tests and grant approvals to carmakers, allowing their vehicles to be sold across the EU. Most Volkswagen and Audi cars are approved by the German authority, according to the Italian ministry.
“The manipulation … harms Germany as an industrial location” — Werner Langen, MEP
German Transport Minister Alexander Dobrindt said in an interview with Bild newspaper that he was ordering independent experts to investigate all Volkswagen diesel cars on the market. Switzerland and South Korea announced their own inquiries.
The accusation, which Volkswagen has not denied — it issued an apology over the weekend — deals a hammer-blow to the reputation of the company and to Germany as a whole.
Martin Winterkorn, Volkswagen’s CEO who had been up for reappointment, now looks certain to lose his job, part of what could be a wider purge of the carmaker’s top management. The company board meets on Friday to discuss his contract renewal.
German MEP Werner Langen told Winterkorn it would be “inevitable” for him to retire in order to prevent further harm from company and country, Langen said in an emailed statement. “The manipulation destroys the trust in the technical quality of the German car industry and harms Germany as an industrial location,” Langen said.
Olaf Lies, economy minister for Lower Saxony state, which holds a 20 percent stake in Volkswagen, told German radio: “I am sure that there will be personnel consequences in the end — there is no question about it.”
The European Consumer Organization said Tuesday signs of wrongdoing connected to emissions standards have been apparent since before the scandal broke. Altroconsumo, one of the Consumer Organizations’s member groups in Italy, performed tests on Volkswagen Golf cars last year and found consumption levels 50 percent higher than the company recorded for the model.
Around 50 percent of passenger cars in Europe run on diesel, compared to just 1 percent in the U.S.
Florian Eder contributed to this article.