• CEO said to plan to brief German chancellor on diesel scandal
  • China is VW's largest market and key profit contributor

Volkswagen AG Chief Executive Officer Matthias Mueller plans to update German Chancellor Angela Merkel about the manufacturer’s probe into diesel-emissions manipulation next week during a trip to China, according to people familiar with the matter. 

Mueller will also meet top executives of VW’s two Chinese joint ventures during the visit to discuss strategic questions, said the people, who asked not to be identified discussing internal matters. China is VW’s largest market, and its two joint ventures in the country are a crucial source of profit for the manufacturer.

Volkswagen is scrambling to figure out how to fix as many as 11 million cars after admitting to installing software that tampered with their pollution-control systems. Repairs, fines and settlements linked to the scandal may cost more than 30 billion euros ($33 billion), according to the Center of Automotive Management in Bergisch Gladbach, Germany. 

A Volkswagen spokesman confirmed Mueller will travel to China with Merkel, declining to elaborate on the agenda and planned talks. 

China’s environmental protection ministry joined the U.S., Europe and Japan earlier this month in announcing a probe after the emissions scandal. Diesel motors are a comparatively small business for VW in China, however, where the majority of the cars it sells are gasoline-powered.

VW plans to recall about 8.5 million cars in Europe and 480,000 in the U.S. In China only 1,950 imported diesel vehicles are affected. No vehicles manufactured by VW’s joint ventures with China FAW Group Corp. and SAIC Motor Corp. are involved in the recall.

The German carmaker has been in talk to lift its stake in the FAW joint venture, and Chairman Hans Dieter Poetsch has said a decision may be reached by the end of this year.

Sixth Suspension

Merkel on Wednesday called on VW to provide full transparency swiftly "so that credibility can be restored."

The company suspended another top engineer, Hanno Jelden, after an internal probe showed he programmed the software used to circumvent emission tests in 2007, Bild am Sonntag reported. Jelden’s was the sixth suspension to become public. The investigation also showed that former VW CEO Martin Winterkorn didn’t learn about the illegal software until September, the newspaper said.

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