Share

Emissions scandal: VW to face 'full-year' loss?

Berlin, Germany - Volkswagen's core auto division will likely plunge into a loss in 2015 as it is set to shoulder the bulk of the costs from the fallout of the company's rigging of diesel-emissions tests, two company sources said on Friday.

VW's namesake brand accounts for about 5 million of the up to 11 million diesel vehicles worldwide that need to be refitted because they could carry software designed to manipulate emissions tests.

Europe's largest automaker is setting aside 6.5 billion euros ($7.4 billion) in the third quarter to cover servicing and marketing outlays related to the scandal.

Bulk of the costs

One source said the bulk of those costs would be booked to the main brand's accounts.

German magazine Der Spiegel reported the possible loss at VW's largest autos division by sales and revenue earlier on Friday. VW declined to comment.

Emissions scandal: Police raid VW headquarters

The biggest business crisis in VW's 78-year history has wiped more than a third off its share price, forced out its long-time CEO, prompted investigations across the world and rocked both the car industry and German establishment.

Hamburg-based M.M. Warburg analyst Marc-Rene Tonn said it was still unclear whether VW would allocate the 6.5 billion euros to brand or group accounts.

Read: VW warned about illegal emissions tricks - report

Third-quarter group results, due to be published on October 28, will also reflect 500 million euros of costs for restructuring in Brazil and Russia as well as 1.4 billion euros in gains from VW's sale of shares in Suzuki, Tonn said.

VW's namesake brand contributed 1.43 billion euros or 21% of the group's 6.82 billion half-year profit, which included strong performances from premium brands Audi and Porsche.

More on VW emissions scandal:

Emissions scandal: VW chief 'knew' of problem
VW to draw-up emissions crisis plan

New VW CEO tells staff: Changes won't be painless

Emissions scandal: VW's S.Korea sales fall 7.8%

Poetsch sees scandal as threat to VW's viability

Sweden to send VW pollution tax bill?

Emissions scandal: Volkswagen recall 'likely'


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE