By William Boston, Friedrich Geiger and Mike Spector
BERLIN-- Volkswagen AG's emissions crisis deepened on Wednesday,
as U.S. environmental authorities and German prosecutors launched
new investigations into allegations of cheating, even as the
company gave an upbeat presentation of its plan to fix millions of
tainted cars in Europe.
German prosecutors in Ingolstadt said they have opened a
preliminary probe into allegations that yet-unknown employees at
luxury car maker Audi AG installed software allowing some
diesel-powered cars to circumvent emissions tests.
The latest investigation adds to a number of government probes
taken against Audi's parent Volkswagen AG, the world's largest auto
maker, over cheating on emissions testing and understating of
emissions and consumption data. The investigation could lead to
criminal charges against Audi employees.
Besides its namesake brand, Volkswagen owns the Audi, Porsche
and Skoda badges, among others.
The company in September was hit with disclosures that it had
rigged engines on some of its diesel models to manipulate emissions
tests.
No individuals have so far been charged with wrongdoing in the
investigations. However, several Volkswagen executives, including
the company's chief executive at the time, Martin Winterkorn, have
either stepped down or been suspended pending the outcome of the
investigations.
Audi is responsible within the Volkswagen group for development
of the three-liter V6 diesel engine that is used by Volkswagen,
Audi and Porsche in a number of luxury sedans and sport-utility
vehicles.
Following notification earlier this month that these engines
didn't comply with U.S. environmental law, the California Air
Resources Board, or CARB, on Wednesday launched an official probe
of Volkswagen, Audi and Porsche vehicles using the three-liter
diesel engine in the model years 2009-2016. It gave VW, Audi and
Porsche 45 days to submit a detailed recall plan for the cars.
A spokesman for Audi in the U.S. said the CARB filing and
deadline for submitting a recall plan were expected after the
official notification earlier this month.
"We fully intend to work on solutions to present to regulators
within this window of time. We take this very seriously and treat
responses to the agencies as a solemn responsibility," the
spokesman said in an email response. He spoke on behalf of
Volkswagen, Audi and Porsche, since Audi is responsible for the
three-liter engine.
Volkswagen officials didn't immediately respond to a request for
comment.
Meanwhile, a spokeswoman for the U.S. Environmental protection
Agency said the agency is weighing possible enforcement options
against Volkswagen related to the three-liter diesel-engine
vehicles and continues to investigate the matter.
In meetings with U.S. environmental authorities last week, Audi
confirmed that some three-liter diesel engines that it develops for
the Volkswagen group contained auxiliary emission control devices
that weren't declared when the vehicles using these engines were
certified in the U.S.
Regarding the Ingolstadt investigation, an Audi spokesman on
Wednesday said: "we ourselves have the greatest interest in a
complete clarification. Therefore we cooperate with the authorities
transparently and openly."
News of the new investigations came as Volkswagen provided
details about how it plans to fix nearly nine million cars in
Europe tainted by the diesel software used to manipulate emissions
tests.
The fix will be carried out by a combination of a software
update and installation of a small cylindrical part that stabilizes
air flowing into the engine, allowing more precise fuel injection
and greater reduction of toxic emissions.
The repair will be necessary for 1.2-liter and 1.6-liter diesel
engines. The newer 2.0-liter engines only require a software
update.
The emissions scandal affects nearly 11 million vehicles
world-wide, most of which are in Europe. About 500,000 cars in the
U.S. are affected by the software.
The relatively simple fix for the lion's share of the tainted
vehicles is welcome news for Volkswagen and suggests that the costs
of a global recall set to begin in January could be significantly
lower than initially expected.
Ferdinand Dudenhöffer, director of the Center for Automotive
Research at the University of Duisburg-Essen, said that the recall
of the European cars could cost around EUR500 million ($532
million), considerably less than the EUR6.7 billion that Volkswagen
has earmarked to finance repairing the affected cars.
It is still unclear how Volkswagen will fix the affected
vehicles in the U.S. The company said the fix approved in Europe
isn't applicable to the U.S. vehicles. Volkswagen is in talks with
U.S. environmental authorities over how to fix the cars in the
U.S.
The investigation of Audi adds another layer of uncertainty,
however.
Nicolas Kaczynski, a public prosecutor in Ingolstadt, where
Audi's headquarters and main manufacturing plant are located, said
his office's investigation was launched after publication of
newspaper reports that Audi was responsible developing engines that
U.S. environmental authorities allege contain illegal software to
evade tough emissions standards.
The rigging of engines in Volkswagen diesel-powered cars to
cheat on emissions testing was disclosed by authorities in the U.S.
Meanwhile, two separate investigations of Volkswagen are being
conducted by prosecutors in Braunschweig, which has jurisdiction
over Wolfsburg where Volkswagen's headquarters are located. One of
those investigations concerns the rigged diesel engines, while the
other centers on the understating of carbon-dioxide emissions.
The company has admitted it understated greenhouse-gas emissions
and fuel consumption on around 800,000 cars. That news led to
probes of the company in several other countries.
The EPA said on Friday that more cars than previously known
contain the suspicious emissions software, namely current and
recent Volkswagen, Audi and Porsche diesel models with three liter
engines.
Write to William Boston at william.boston@wsj.com, Friedrich
Geiger at friedrich.geiger@wsj.com and Mike Spector at
mike.spector@wsj.com
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(END) Dow Jones Newswires
November 25, 2015 17:48 ET (22:48 GMT)
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