Manufacturing News

Volkswagen investigation expected to take months

Volkswagen says the independent investigation into its admitted use of software used to cheat diesel emissions tests will take several months.

AFP reports that, while German prosecutors have no plans to hold a formal inquiry into the scandal, the inquiry in question was commissioned by the German auto giant itself. It will be conducted by US legal firm Jones Day.

The company said in a statement that because of the time needed by the inquiry it has decided to postpone an extraordinary general meeting that was scheduled for November 9.

"It is unrealistic, from a point of view of both time and content, that we will be able within only a few weeks to come up with the informed answers that shareholders can justifiably expect," VW said in a statement.

"Furthermore, the steering committee is of the opinion that the employees involved will be needed to clear up the matter and draw up solutions to the problems. Their work should not be made even more difficult by having to prepare a shareholders' meeting at the same time."

The company plans to recall and refit up to 11 million cars with the software used to cheat diesel emissions tests.

The company has set aside $6.5 billion euros to cover the cost of the recall but, according to analysts, lawsuits from car owners and fines from regulators could mean the company has to pay more than that figure.

For example, VW may be faced with up to $18 billion in fines in the US alone.

The scandal may extend as far as Australia. The Australian Competition and Consumer Commission (ACCC) is currently investigating whether VW Australia has supplied cars or car components into the Australian market that use defeat devices.

According to ACCC Chairman Rod Sims, the use of defeat devices is prohibited under the Australian Design Rules, which are picked up as Australian Consumer Law (ACL) mandatory safety standards.

“Businesses must be able to substantiate any claims they make. The ACCC will be seeking marketing materials from VW Group and will not hesitate to take action if consumers were exposed to false, misleading or deceptive representations,” Sims said in a statement.

The maximum penalty per breach of the ACL is $1.1 million for a corporation.

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