Volkswagen shares plunge on emissions issue
SHARES in German auto giant Volkswagen fell sharply in early trading on the Frankfurt stock exchange yesterday after it emerged that some of its diesel cars in the United States had been fitted with software that gave false emissions data.
In the first few minutes of trading, Volkswagen shares fell by as much as 13.23 per cent to 140 euros in a slightly lower market.
But it later fell 23 per cent to 125.40 euros, wiping out about 15.4 billion euros of Volkswagen's market value, Bloomberg reported.
The carmaker faces penalties of up to US$18 billion (S$25 billion) after being accused of designing software for almost 500,000 diesel cars that deceives regulators measuring toxic emissions.
In a statement on Sunday, the carmaker had said that the United States Environmental Protection Agency (EPA) and the California Air Resources Board had found that while testing diesel cars of the Volkswagen Group, they had "detected manipulations that violate American environmental standards".
The company told US dealers to halt sales of some 2015 diesel cars on Sunday. It has also been hit with a mandatory recall of 500,000 Volkswagen and Audi vehicles from model years 2009 to 2015.
"Put simply, these cars contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test," Cynthia Giles, an enforcement officer at the EPA, told reporters in a teleconference on Friday.
When the cars are on the road, they emit as much as 40 times the level of pollutants allowed under clean air rules meant to ensure public health is protected, Ms Giles said.
Volkswagen chief executive Martin Winterkorn issued an apology and said the group had ordered an external investigation into the matter.
REUTERS, AGENCE FRANCE-PRESSE