VW's emission fraud: situation goes from bad to worse

Days after Volkswagen's emission fraud was revealed in the United States, the situation has gone from bad to worse. Click here to read about the fraud.

In a recent development, Volkswagen has announced that approximately 11 million vehicles were fitted with the 'defeat device' to dodge emission norms. A maximum penalty of $37,500 for each recalled vehicle can be levied on the German manufacturer. The company has already set aside a sum of 6.5 billion euros or $7.3 billion for legal provisions.

Dr. Martin Winterkorn, Volkswagen AG CEO, publicly apologized for the fraud and assured that the company is probing into the matter and will soon take appropriate steps to counter its wrong-doings. However, with VW's reputation tarnished and customer trust completely shaken, the road ahead doesn't seem any smoother for the 68-year old. There are rumours that he might be replaced soon. However, VW officials have rubbished any such claims.

The company has lost 23 billion euros in market value due to a 35% fall in share prices in 2 days. Things don't seem any good for the German auto giant.

Germany, France, Italy and South Korea have already ordered scrutiny of Volkswagen vehicles. The EU commission and India among other countries are following the matter closely but haven't announced an investigation just yet.

Source: Bloomberg