VW ‘rigged tests on 2.8m cars in Germany’

Updated 25 September 2015

VW ‘rigged tests on 2.8m cars in Germany’

WOLFSBURG, Germany: Volkswagen rigged emission tests on about 2.8 million diesel vehicles in Germany, the country’s transport minister said, nearly six times as many as it has admitted to falsifying in the US.
His comments, pointing to cheating on a bigger scale than previously thought, deepened the crisis at the world’s largest automaker
Volkswagen has named Matthias Mueller, head of its luxury sports car brand Porsche, as its new CEO tasked with steering it out of the wreckage of a pollution test rigging scandal.
Mueller, 62, will take over immediately, replacing Martin Winterkorn who stepped down two days earlier, said the head of the supervisory board, Berthold Huber, at the car maker’s headquarters in Wolfsburg, northern Germany.
“My most pressing task will be to restore confidence in the Volkswagen Group — through an unsparing investigation and maximum transparency, but also by drawing the right lessons from the current situation,” Mueller vowed.
“Volkswagen under my leadership will make every effort to develop the most rigorous compliance and governance standards in the entire industry and to implement them.”
Huber praised Mueller as “a figure with great strategic, entrepreneurial and social skills.”
“He knows the company and its brands, will tackle his new position immediately and with full force. We explicitly appreciate his critical and constructive views.”
Shares in the German company, which had started to steady after sharp falls earlier this week, were down 4.5 percent at 1335 GMT after Bloomberg also reported that executives in Germany controlled aspects of the manipulated US tests, citing three people familiar with the US business.
Volkswagen is under heavy pressure to show it can get to grips with the biggest business-related scandal in its 78-year history.
Mueller, 62, would represent part of the fresh start that Winterkorn said was needed when he stepped down.
Volkswagen shares have plunged as much as 40 percent, wiping tens of billions of euros off its market value, since US regulators said last Friday it had admitted to programming diesel cars to detect when they were being tested and alter the running of their engines to conceal their true emissions.
The scandal keeps growing. German transport minister Alexander Dobrindt said on Thursday Volkswagen had also cheated tests in Europe, where its sales are much higher, and on Friday put the number of affected vehicles in Germany at 2.8 million.
Regulators and prosecutors across the world are investigating the scandal.
The wider car market has been rocked, with manufacturers fearing a drop in sales of diesel cars and tighter regulations, while customers and motor dealers are furious that Volkswagen has yet to say whether it will have to recall any cars.
“VW needs to be very open about what has happened, how it was possible that this could happen to make sure that this never happens again in the future,” said a leading Volkswagen shareholder, underlining the importance of the board meeting.
“These are priorities that should override all other considerations at the moment.”
The task facing Mueller, if his selection is confirmed, is huge. The company said on Tuesday 11 million vehicles worldwide were fitted with the software that allowed it to cheat US tests, while adding it was not turned on in the bulk of them.
Analysts hope that on Friday it may at last say which models and construction years are affected, and whether cars will need to be refitted.
They also expect it to announce a full investigation of the scandal, with German newspaper Handelsblatt saying it planned to hire US law firm Jones Day to lead a no holds barred inquiry, and to give the outlines of a new management structure likely to be less centralized, but with a clearer system of checks.

Volkswagen has long been seen as a symbol of German industrial prowess and the auto industry is one of the country’s major employers and a key source of export revenue.
Earlier this month, Volkswagen delivered a presentation to investors at the annual Frankfurt motor show entitled “Stability in Volatile Times.” Now Chancellor Angela Merkel is urging it to act quickly to restore confidence in the Volkswagen name.

Frank Schellenberg, a taxi driver in Wolfsburg where the carmaker employs around 70,000 people, said locals felt betrayed and feared the worst.
“They have lost any contact with the real world, the customers who have been buying their cars in good faith,” he said, pointing to the firm’s 13-story administrative building. “Everyone in Wolfsburg is expecting tough times and job cuts.”
Half a dozen Greenpeace protesters were outside Volkswagen’s Wolfsburg plant on Friday, waving banners saying “No more lies!” in front of three diesel-engine VW Golf hatchbacks.
Evercore ISI analyst Arndt Ellinghorst said he would welcome the appointment of Mueller, a former head of product strategy and close to the Piech-Porsche family that controls Volkswagen.
But Bernstein’s Max Warburton questioned whether a man who has spent more than three decades at the company was the right man to signal a break with the past. He favors Herbert Diess, a former research and development chief of rival BMW who was hired to run the VW brand in December.
“VW needs to think big and bold,” Warburton said, urging the new CEO to offer to buy back and scrap almost 500,000 diesel cars sold in the US, which would cost about $6 billion, as well as suspend the 100 engineers most closely associated with the affected engines and software.
Another top Volkswagen shareholder said it would have been better for Winterkorn to sort out the crisis before handing over to a successor, pointing to how oil company BP managed its recovery from the 2010 Gulf of Mexico oil spill.
“I would have preferred Winterkorn to have stuck around for another month or so, through the worst of the storm, then the company appoint another CEO.”
Environmentalists have long complained that carmakers game the vehicle testing regime to exaggerate the fuel-efficiency and emissions readings of their vehicles.
The International Council on Clean Transportation, one of the research groups that helped uncover Volkswagen’s deception, has published new data showing carbon dioxide emissions in European road tests were on average 40 percent higher than the laboratory results advertised in car sales literature.
European politicians on Wednesday voted to speed up a tightening of testing rules.

UAE property developers’ earnings give Gulf markets a boost

Updated 17 February 2019

UAE property developers’ earnings give Gulf markets a boost

  • Real estate sector gets confidence boost
  • DAMAC gains despite 87 pct drop in Q4 net profits

DUBAI: Most stock markets in the Middle East closed higher on Sunday, reflecting a rally in global stock markets on Friday, and were also boosted by better-than-expected company results, particularly in real estate.

The Abu Dhabi index gained 0.7 percent and the Dubai index 0.6 percent, as two of the largest property developers in the United Arab Emirates posted positive fourth-quarter financial results last week that beat market expectations.

“The market is starting to rebuild confidence in earnings as a driver for sentiment,” said Arqaam Capital in a research note. “Sentiment on the UAE was very weak in 2018, specifically for real estate, on concerns over oversupply risk, pricing pressure that is leading to extended payment plans, and a rental yield compression that is continuing to fall,” Arqaam said.

“But Q4 numbers provided evidence that a few developers have emerged as winners (Emaar Co’s, Aldar) out of market consolidation.” Emaar Properties, Dubai’s largest listed developer, reported a 27 percent rise in fourth-quarter profit.

The stock rose 2 percent on Sunday. DAMAC Properties closed up 0.8 percent, despite having reported a nearly 60 percent fall in full-year profit and an 87 percent drop in fourth-quarter net profits.

In Abu Dhabi, Aldar Properties gained 3.6 percent. Last week, the developer reported a rise in fourth-quarter earnings and higher dividends for 2018. In other sectors, Abu Dhabi Islamic Bank rose 0.5 percent after saying it had no merger and acquisition plans. This was in response to a Bloomberg report last week which said the bank was considering such options.

The Saudi index closed 0.4 percent down, in contrast to the rest of the region’s markets. Arab National Bank reported an increase in full- year net profit to 3.13 billion riyals ($834.62 million) from 3.03 billion riyals one year earlier.

The stock remained unchanged and this failed to give support to the banking sector. Alinma Bank < 1150.SE> and Al Rajhi Banking & Investment Corp. lost 0.3 percent and 0.6 percent, respectively.

In Egypt, where the main index gained 1.4 percent, Orascom Investment Holding, up 3.2 percent, was among the stocks attracting the highest trading volume. Shares in the company jumped last week after its chairman, Egyptian billionaire businessman Naguib Sawiris, said he saw possible investment opportunities in North Korea if a summit between its leader Kim Jong Un and US President Donald Trump later this month was successful.

SAUDI The index lost 0.4 pct to 8,592 points ARABIA DUBAI The index rose 0.6 pct to 2,550 points ABU DHABI The index rose 0.7 pct to 5,070 points QATAR The index gained 0.7 pct to 10,011 points EGYPT The index rose 1.4 pct to 15,199 points KUWAIT The index gainedd 0.1 pct to 5,427 points OMAN The index was down 0.8 pct at 4,077 points BAHRAIN

The index went up 0.6 pct to 1,381 points ($1 = 3.7502 riyals)