Volkswagen faces billions in costs after admitting rigging emissions tests
Volkswagen is not facing pressure to sell its trucks business to raise money, despite costs expected to mount to billions of euros in the wake of the emissions scandal, according to a report in a German newspaper.
“The operating results of the Volkswagen group are good, despite everything. There won’t be a fire sale,” management board member Andreas Renschler was quoted as saying in an interview with Frankfurter Allgemeine Sonntagszeitung (FAS), according to Reuters.
Volkswagen last year hired ex-Daimler executive Renschler to align its truck manufacturer MAN with its Swedish subsidiary Scania, which also produces commercial vehicles. The aim was to establish a global truck and bus business to better compete with rivals Daimler and Volvo.
When asked whether the new structure could mean that the trucks business, now separated from Volkswagen’s passenger car operations, could be spun off and floated on the stock exchange, Renschler said: “Everything is possible, but only if it makes strategic sense.”
The German automaker has struggled to save face after it admitted to cheating emissions tests on diesel passenger vehicles. Cars were fitted with so-called “defeat devices” that could detect when they were being tested, changing the performance accordingly to improve results. Nearly 11 million cars worldwide, including eight million in Europe, were rigged in this manner.
The emissions scandal led to the resignation of former CEO Martin Winterkorn, who was replaced by Matthias Mueller, the former chief executive of Porsche.
The US Justice Department has sued Volkswagen for up to $48 billion for allegedly violating environmental laws, Reuters reported in January.
The situation in South America, especially in Brazil, was “extremely difficult”, Renschler noted, adding that it would be the right move, however, to wait out the downturn and maintain production in Brazil until the economy recovers.
Meanwhile, the market in Russia appears to have bottomed out, while the American market is likely to decline slightly. Africa, however, shows some promise. “Then we have hopes for Iran, of course, even if there won’t be quite the gold-rush atmosphere that some are expecting.”