VW's dieselgate bill jumps on 'complex' US recalls

Volkswagen on Friday said it was setting aside another 2.5 billion euros to deal with the fallout from the "dieselgate" scandal in the United States as its efforts to recall tainted cars there proved to be more "complex" than expected.

The latest provisions bring the total sum set aside by Volkswagen to deal with fines and costs over the diesel scandal to 25.1 billion euros ($29.6 billion).

"In the third quarter, negative special items of circa 2.5 billion euros are expected to weigh on the operating result," the German car giant said in a statement.

"The reason is an increase in provisions relating to the buyback/retrofit programme for 2.0-litre TDI vehicles, which is part of the settlements in North America that is proving to be far more technically complex and time consuming."

Volkswagen last year agreed to buy back or repair nearly half a million 2.0-litre diesel cars in the US that had been fitted with cheating software to make them seem less polluting than they were.

The group later agreed to a similar settlement concerning some 80,000 3.0-litre cars as well.

The storied German auto giant has been engulfed in crisis since US regulators uncovered the cheating scam two years ago, and its legal woes are far from over at home and abroad.

- Arrests at Audi -

In Germany on Thursday, prosecutors arrested a second Audi employee and said they were widening their investigation into the diesel emissions cheating scam to include more suspects.

German media named the arrested suspect as Wolfgang Hatz, who stepped down from his post on Porsche's management board last year after being suspended over the dieselgate investigation.

Hatz was head of engine development at Audi from 2001 to 2007, before moving on to lead powertrain development at the VW group and then becoming research and development chief at Porsche, another VW subsidiary.

Also in custody since July is former Audi executive Giovanni Pamio, suspected of instructing engineers to design software that could cheat emissions tests.

In another setback for Volkswagen, German news weekly Der Spiegel on Friday reported that the carmaker had improperly registered nearly 500,000 gasoline-powered cars in the US between 2009 and 2017.

The magazine, which did not cite its sources, said VW had failed to disclose software updates as required by US regulators, and could now face fines.

VW was not immediately available for comment when contacted by AFP.

VW shares were down 0.3 percent to 137.95 euros in afternoon trading in Frankfurt, underperforming the DAX 30 index of leading German shares which was up 0.5 percent.

VW said it would publish its third-quarter results on October 27.

Source: AFP