VW scandal deepens as emissions woes spread to gasoline cars

Volkswagen AG said it found faulty emissions readings for the first time in gasoline-powered vehicles, widening a scandal that so far had centered on diesel engines. Separately, the company’s Porsche unit said it’s halting North American sales of a model criticised by U.S. regulators. Volkswagen said an internal probe showed 800,000 cars had “unexplained inconsistencies” concerning their carbon-dioxide output. Previously, the automaker estimated it would need to recall 11 million vehicles worldwide, more than Volkswagen sold last year. It was unclear how much overlap there was between the two tallies. The company said the new finding could add at least 2 billion euros (AED 8.04 billion) to the 6.7 billion euros (AED 26.9 billion) already set aside for fixes to the affected vehicles but not litigation, fines or customer compensation. The crisis that emerged after Volkswagen admitted in September to cheating U.S. pollution tests for years with illegal software has shaved more than one-third of the company’s stock price and led to a leadership change. Today’s revelation adds to the pressure on Volkswagen’s new chief executive officer, Matthias Mueller, who replaced Martin Winterkorn and was previously head of Porsche. Volkswagen’s supervisory board said it will meet soon to discuss further measures and consequences. The company’s Polo, Golf and Passat models are affected as well as the subcompact A1 and the A3 hatchback at the Audi premium brand, a Volkswagen spokesman said by phone. The affected models at other brands include the Skoda Octavia, the Seat Ibiza and the Seat Leon. The 1.4-liter, 1.6-liter and 2-liter TDI diesel engines account for the vast majority of affected cars. The only gasoline engine is a 1.4-liter version with cylinder head shutdown, but the number of those cars “is very limited,” the spokesman said. Most of the affected cars are in Europe and the 2 billion euros (AED 8.04 billion) in possible costs are an initial estimate, according to the spokesman. The automaker will determine how much money to set aside once the probe has been finalised, he said. The 3.0-liter diesel motors targeted on Monday by a U.S. Environmental Protection Agency probe aren’t part of the latest finding. The company rejected allegations that its cheating on diesel-emissions tests included Porsche and other high-end vehicles. The EPA said its new investigation centers on the Porsche Cayenne and VW Touareg sport utility vehicles and as well as larger sedans and the Q5 SUV from Audi. But then late Tuesday, Porsche’s North American division said it would voluntarily discontinue sales of diesel-powered Cayennes from model years 2014 to 2016 until further notice. The Atlanta-based unit’s statement reiterated that the EPA notice was unexpected and that owners can operate their vehicles normally. “We are working intensively to resolve this matter as soon as possible,” Porsche said in the statement. (By Benedikt Kammel and Christoph Rauwald/Bloomberg)