VW shares sink again as German prosecutors weigh fresh action

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Berlin (dpa) – Shares in embattled German carmaker Volkswagen resumed their fall on Thursday as prosecutors considered widening their probe into the group as a result of the deepening emissions scandal.

After plunging by 9.5 per cent on Wednesday, VW shares tumbled by 2.7 per cent to 98 euros (106.42 dollars) in early Thursday trading on the Frankfurt Stock Market.

“The problems are much deeper at Volkswagen,” said analyst Andreas Lipkow at the investment house Kliegel & Hafner.

VW has lost about one third of its value since it admitted in September to installing software in several of its diesel-powered models aimed at cheating emissions tests around the world.

VW said last month it was setting aside 6.7 billion euros to cover the costs of the scandal involving its diesel models.

The scandal, however, grew this week when the group also admitted to carbon dioxide emissions irregularities affecting up to 800,000 VW cars, which could cost Europe’s biggest carmaker another 2 billion euros.

After launching a full-scale inquiry into VW’s so-called Dieselgate, German prosecutors now say they are considering whether to include the carmaker’s admission that carbon dioxide data is false as part of their investigation.

A spokesman for the prosecutor in the northern city of Braunschweig, whose area of responsibility includes the VW head office in nearby Wolfsburg, told dpa a preliminary study was under way to establish if VW’s actions could have broken German law.

That is the first step in German justice procedures before a full-scale inquiry is launched.

VW has also been forced to reject claims made last week by US environmental protection regulators that the diesel emission test scam also included its luxury sports carmaker Porsche.

The news that CO2 outputs formed part of the scandal lead to renewed political pressure on VW with the group facing calls – including from Chancellor Angela Merkel – for the company to ensure a thorough and transparent investigation into the affair.

The European Commission also warned on Thursday that the emissions scandal could have economic consequences for Germany and other EU member states.

The revelations “could have a negative impact on car sales, manufacturing output and real GDP (gross domestic product) growth in some member states, notably Germany,” the commission writes in its autumn economic forecast.

New VW registrations in Britain dropped by 9.8 per cent to 13,970 in October, compared with the same month last year, The Society of Motor Manufacturers and Traders said.

In Germany, the fallout from the VW scandal could spill over into other sectors, eroding confidence and harming corporate investment, the European Union’s executive said.

The commission went on warn that the scandal could also impact production in Hungary and weaken the export of related products from Slovakia.

Environmental groups have joined the commission in demanding better emission controls procedures.

“The approval systems of the (EU) member states have failed,” EU Industry Commissioner Elzbieta Bienkowska told the daily Sueddeutsche Zeitung.

“We intend to check and verify that the national authorities are working properly,” Bienkowska said, adding that EU members should exchange the results of their vehicle tests.

Bienkowska had been scheduled to meet with VW officials during a visit to Berlin on Thursday, but the carmaker cancelled the meeting at short notice, her office said.

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