Wednesday, 6 January 2016
VW shares fall after US lawsuit
The supervisory board of VW faces a difficult time. Yesterday, shares of Volkswagen AG fell six per cent following plans by the US government to file a lawsuit.
Matthias Muller, chief executive officer of Volkswagen AG is expected to travel to the US next week to meet officials of the Environmental Protectiona Agency to discuss the matter.
The civil lawsuit, announced on Monday, reflects the growing number of allegations against VW since the German company admitted in September to installing devices to cheat emissions tests in several 2-litre diesel vehicle models.
The civil complaint against the German automaker, filed on behalf of the Environmental Protection Agency in US District Court in Detroit, alleges the company illegally installed software designed to make its diesel engines pass federal emissions standards while undergoing laboratory testing.
The vehicles then switched off those measures to boost performance in real-world driving conditions, resulting in greenhouse gas emissions up to 40 times greater than federal environmental standards.
According to a Reuters review of the US complaint, VW could in theory face fines of as much as $37,500 per vehicle for each of two violations of the law; up to $3,750 per "defeat device"; and another $37,500 for each day of violation.
The complaint says illegal devices to impair emission control systems were installed in nearly 600,000 vehicles in the United States.
In September, US regulators initially said Europe's biggest carmaker could face fines in excess of $18 billion. This week, figures as high as $61 billion have been mentioned.
The lawsuit had been expected, and analysts believe any fine will be far below the theoretical maximum. Although US authorities sued Toyota for up to $58 billion for environmental violations around the turn of the century, they agreed a settlement that cost the Japanese carmaker about $34 million.
Assistant Attorney General, John Crudent, has said: “Car manufacturers that fail to properly certify their cars and that defeat emissions control systems breach the public trust, endanger public health and disadvantage competitors.
The US Justice Department, which lodged the lawsuit, has said it expected VW to take appropriate measures” to make the nearly 600,000 vehicles compliant with US emissions regulations.