Volkswagen AG will have to operate hardware modifications on around 3 million autos in Europe affected by the company’s comprehensive recall triggered by the diesel emissions scandal.
Germany’s Volkswagen AG, the largest European carmaker, has admitted last month it had rigged diesel emission tests in the United States, with the illegal software actually installed in up to 11 million vehicle sold worldwide, 8.5 million of them being in the home market of Europe. While many of the affected engines can be fixed with a rather simple software update, model equipped with the 1.6-liter engine also need technical modifications, with the company saying the European recall would span at least throughout next year. Volkswagen also announced recently the recall costs alone would be of more than the 6.5 billion euros ($7.4 billion) already set aside during the third quarter financial exercise.
The company has been going through its biggest business crisis in its 78-year existence, with the revelation they hid the emissions cheat wiping out around a third of the market value and forcing out the long-running CEO Martin Winterkorn. Now the new chief executive, Matthias Mueller, has announced further cost cutting measures at the core VW brand and the decision to postpone or axe any non-essential investment plans until the real costs stemming from the scandal can be tallied. The manager also said the company’s credit rating was one of the most important assets to defend and the recovery could take just two to three years if the right management decisions are taken.