BERLIN • Germany is to retest all Volkswagen (VW) car models to gauge their genuine emission levels after new revelations from the carmaker pushed Berlin to act.
Transport Minister Alexander Dobrindt said on Wednesday that all current models sold under the VW, Audi, Skoda and Seat brands - with both diesel and petrol engines - will be tested for carbon dioxide and nitrogen dioxide emissions, following a VW statement on Tuesday that it had understated the level of carbon dioxide emissions in about 800,000 cars, and consequently their fuel usage.
This means affected vehicles are more expensive to drive than their buyers had been led to believe.
Previously the government had said it would review only nitrogen dioxide emissions from VW diesel cars. "We all have an interest that everything at VW is turned over and reviewed," Mr Dobrindt said, adding that the government wanted to force VW to pay the extra car taxes that would be incurred by the higher CO2 emission levels.
Mr Dobrindt said the firm had caused "irritation in my ministry and with me", while Chancellor Angela Merkel's spokesman said VW "has a duty to clear this up transparently and comprehensively".
VW said it had told United States and Canadian dealers to stop selling recent models equipped with its 3.0 V6 TDI diesel engine.
Moody's downgraded VW's credit rating to A3/P-2 with a negative outlook. Its lead analyst for VW Yasmina Serghini said: "These new claims pose further challenges to Volkswagen's financial flexibility and competitive position, and heighten Moody's concerns about Volkswagen's internal control and governance issues." VW shares closed down 9.5 per cent.
The admission added new dimensions to a crisis that had focused on how VW cheated in US tests on diesel cars for emissions of nitrogen oxide, which causes smog. It led to VW adding €2 billion (S$3.1 billion) to its expected costs from the scandal, and is the first time petrol cars have been drawn into the crisis.
Adding to VW's woes, India has sought a response from the company after probes into four car models showed diesel-fuel emissions exceeding permissible limits, with about 314,000 vehicles potentially affected, said Heavy Industries Ministry official Ambuj Sharma.
In initial indications of the scandal affecting sales figures, VW was the only German carmaker to report a decline in car registrations in Germany last month. New registrations of VW-branded cars in Britain also fell 9.8 per cent last month compared with October last year, the Society of Motor Manufacturers and Traders said yesterday. In South Korea, VW's sales nearly halved last month from a year earlier, according to data released yesterday.
REUTERS, BLOOMBERG
