VW admits 11m cars have emission-cheat software as it sets aside $7bn

VW has admitted some 11 million cars worldwide were fitted with the suspect emissions-cheating software. The company has set aside more than $7bn (£4bn) to deal with the crisis. The scandal engulfing Volkswagen, which has admitted cheating diesel vehicle emissions tests in the United States, spread on Tuesday as South Korea said it would conduct its own investigation and a French minister called for an EU-wide probe. The German carmaker’s shares fell to a new three-year low in early trade, extending Monday’s 19% plunge.

I am sure that there will be personnel consequences in the end, there is no question about it.

VW supervisory board member Olaf Lies

Shares in other makers also tumbled, with investors spooked by the possibility VW may not be alone in cheating the system. Europe’s biggest automaker could face penalties of up to $18 billion in the United States, as well as class-action lawsuits from buyers and damage to its reputation, with U.S. regulators alleging it misled them for more than a year. Michael Horn, the boss of VW’s U.S. operation admitted: “We have totally screwed up.” The South Korean probe into Volkswagen will involve 4,000 to 5,000 Jetta, Golf and Audi A3 vehicles produced in 2014 and 2015, Park Pan-kyu, a deputy director at South Korea’s environment ministry, told Reuters.

Winterkorn either knew of proceedings in the U.S. or it was not reported to him.

Analyst Arndt Ellinghorst