VW ‘rigged tests on 2.8m cars in Germany’

Updated 25 September 2015
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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.

TOUGH TIMES AHEAD
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.


Oil rises after US Navy destroys Iranian drone

Updated 19 July 2019
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Oil rises after US Navy destroys Iranian drone

  • The International Energy Agency is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day
  • Speculators have exited options positions that could have provided exposure to higher prices in the next several years

TOKYO: Oil prices rose more than 1 percent on Friday after the US Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East.
Brent crude futures were up 82 cents, or 1.3 percent, at $62.75 by 0100 GMT. They closed down 2.7 percent on Thursday, falling for a fourth day.
West Texas Intermediate crude futures firmed 61 cents, or 1.1 percent, at 55.91. They fell 2.6 percent in the previous session.
The United States said on Thursday that a US Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.
The move comes after Britain pledged to defend its shipping interests in the region, while US Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf.
Still, the longer-term outlook for oil has grown increasingly bearish.
The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a US-China trade spat, its executive director said on Thursday.
The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said.
“China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year.
Speculators have exited options positions that could have provided exposure to higher prices in the next several years, market participants said on Thursday.
US offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts.
Royal Dutch Shell, a top Gulf producer, said Wednesday it had resumed about 80 percent of its average daily production in the region.