Pressure piled on the head of Volkswagen yesterday in the wake of an emissions-testing scandal that’s seen 15 billion euros (US$16.9 billion) wiped off the company’s market value.
Following revelations that the German carmaker had rigged US emissions tests for about 500,000 diesel cars, VW CEO Martin Winterkorn apologized on Sunday for the fact that his company had “broken the trust of our customers and the public.”
But saying sorry wasn’t enough for investors as they digested the financial and reputational implications of the scandal on the world’s biggest carmaker by sales — VW’s share price fell by a stunning 17.14 percent to close at 133.70 euros in Frankfurt. Earlier it had tumbled by more than 20 percent.
In the wake of Friday’s revelations from the US’s Environmental Protection Agency, VW has already halted sales of some vehicles in the United States and pledged to cooperate with regulators in an investigation that could, in theory, see the company fined up to US$18 billion.
Industry analysts said Winterkorn faces difficult questions in the coming days, particularly when the company’s board is scheduled to meet on Friday.
“At the moment, I’d be surprised if Winterkorn can ride this out, but in Germany there’s often a slightly slower process in these matters,” said Christian Stadler, a professor of strategic management at Warwick Business School.
Stadler said that if VW were a US company, then the CEO would have gone more or less immediately.
In essence, VW stands accused of skirting the US’s clean air rules. The EPA said VW used a device programed to detect when the cars are undergoing official emissions testing. The software device then turns off the emissions controls during normal driving situations, allowing the cars to emit over the legal limit of pollutants.
Guido Reinking, a German auto expert, said that for a company to engage in such blatant trickery its top executives would have to be informed.
Winterkorn led research and development across the VW group from 2007. He became chairman of the management board the same year.
“It’s almost impossible to imagine that he didn’t know about this special way of programing the engine,” Reinking told German television station n-tv.