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VW Cheating Scandal Threatens to Ensnare BMW as Probe Widens

Image: VW Cheating Scandal Threatens to Ensnare BMW as Probe Widens

Thursday, 24 Sep 2015 08:33 AM

The diesel-cheating affair that toppled Volkswagen AG’s chief executive officer deepened as Germany announced plans to widen its investigation and the scandal threatened to ensnare rival BMW AG.

BMW plunged as much as 9.7 percent after a German magazine reported Thursday that a diesel version of the X3 sport utility vehicle emitted as much as 11 times the European limit for air pollution in a road test. German Transport Minister Alexander Dobrindt said that spot checks of vehicles would not be limited to VW.

“It’s self-evident” that Germany’s motor vehicle administration “will concentrate its investigations not only on the Volkswagen models in question but will also do spot checks of other car manufacturers,” Dobrindt told reporters in Berlin.

The entire auto industry and the methods used for testing vehicles are coming under scrutiny following revelations that VW’s “clean diesel” cars have software intended to defeat emissions tests. The European automakers’ lobby group, the ACEA, on Wednesday placed the blame in VW’s court, issuing a statement saying that “there is no evidence this is an industry-wide issue.”

The BMW SUV was road-tested by the International Council on Clean Transportation, the same group whose tipoff led U.S. regulators to investigate a gap between VW diesels’ emissions in tests and on the road, Germany’s Autobild reported. BMW said that there’s no system in its cars that responds to tests differently than it would operate on the road.

Shares Drop

“There is no function to recognize emissions testing cycles at BMW,” the Munich-based company said in a statement in response to the report. “All emissions systems remain active outside the testing cycles.”

BMW shares traded down 6.6 percent to 74.53 euros at 12:59 p.m. in Frankfurt. German carmaker Daimler AG dropped as much as 5.8 percent. VW, which has lost more than 20 billion euros in market value this week, was 2 percent higher.

“There’s no suggestion BMW has done anything illegal,” said Juergen Pieper, an Frankfurt-based analyst with Bankhaus Metzler. “However, there are concerns for the long-term damage on the business with diesel cars for every manufacturer that builds cars with these engines.”

Resignation

Winterkorn resigned Wednesday after revelations that the company cheated on diesel emission tests. Other executives may also lose their jobs, and the automaker is seeking a criminal investigation into the affair. VW’s supervisory board will discuss the CEO’s replacement at its meeting on Friday.

Possible successors include Porsche unit chief Matthias Mueller, who is backed by members of the family that controls a majority stake in Volkswagen, and Herbert Diess, a former BMW AG executive who took over the newly created post of VW brand chief this year, a person familiar with the matter said.

Emissions measured in road tests of 15 new diesel cars were an average of about seven times higher than European limits, according to a study ICCT published last October.


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The diesel-cheating affair that toppled Volkswagen AG's chief executive officer deepened as Germany announced plans to widen its investigation and the scandal threatened to ensnare rival BMW AG.BMW plunged as much as 9.7 percent after a German magazine reported Thursday...
vw, volkswagen, bmw, scandal
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2015-33-24
Thursday, 24 Sep 2015 08:33 AM
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