Volkswagen shares crash as exhaust scandal widens

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Berlin (dpa) – Shares in Volkswagen crashed again on Tuesday after the German carmaker issued a third-quarter profit warning and admitted that emissions tests for about 11 million cars around the world may have been manipulated.

Europe’s biggest carmaker said it is setting aside 6.5 billion euros (7.3 billion dollars) to cover costs of the investigation into how software was used to cheat emissions tests.

VW shares plunged about 20 per cent in the wake of the announcement after the stock closed down 18.6 per cent on Monday.

The German-based group said that it had uncovered “striking differences” between the measured values in tests and when they are in normal driving conditions.

The head of the carmaker’s US operations apologized late Monday for the German automaker’s use of software designed to help its cars cheat US emissions standards.

VW had been “dishonest” with environmental regulators, Michael Horn, chief executive of Volkswagen Group of America, told an audience in New York at a launch event for the company’s new Passat model.

“In my German words, we totally screwed up,” he said.

The US Justice Department is conducting a criminal probe of the emissions case, the Bloomberg news agency reported late Monday, citing US officials speaking on condition of anonymity.

The investigation comes in the wake of the US Environmental Protection Agency late last week ordering VW to recall nearly a half million diesel engine cars.

Volkswagen admitted on the weekend it had equipped about 482,000 cars in the US with sophisticated software that covertly turns off pollution controls when the car is being driven, and turns them on only when it detects that the car is undergoing an emissions test.

The company, which faces high fines and civil claims, is to hold a crisis board meeting on Wednesday.

The scandal spread Tuesday to Australia and South Korea, where reports say governments are demanding their own investigations into whether the emissions-cheating software was installed in vehicles sold in their countries.

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