Volkswagen Diesel Engine Fix to Get Started in September 2016

  • German ministry says 1.6-liter diesel engines need new parts
  • Bigger 2.0-liter diesel engines only need software fix

VW's U.S. CEO to Face Congress in Diesel Probe

Owners of millions of Volkswagen AG diesel vehicles will have to wait until September 2016 before the automaker can start repairing the tainted engines.

In the European Union, the carmaker will need to exchange or rebuild parts for about 3.6 million engines equipped with illegal software that turned on full pollution controls only during tests, German Transport Minister Alexander Dobrindt said in a video posted on the ministry’s website.

The parts for 1.6-liter engines won’t be available for these engines until next September, about a year after VW admitted to cheating on emissions tests. Larger 2-liter motors will need only a software fix, which should be available from January, Dobrindt said. The minister didn’t comment on the proposal for 1.2-liter engines.

The time line was laid out by Volkswagen in a Wednesday proposal to German authorities in the first stage of a global recall that could involve nearly 11 million vehicles, including about 8 million in the EU. The ministry’s statement is the first detailed disclosure of the process. Chief Executive Officer Matthias Mueller has said recalls will start in January and last through 2016.

“It’s important to us that we come to a conclusion very quickly, especially about the technical details,” said Dobrindt. The Federal Motor Transport Authority, or KBA, will need several days to review the company’s proposals, he said. Volkswagen wasn’t immediately able to comment on the hardware fixes required in Europe.

Costlier Fix

Manufacturing and producing new parts for the 3.6 million vehicles is far costlier than a simple software upgrade. After the disclosure, Volkswagen shares pared earlier gains, trading up 2.8 percent to 106.90 euros at 12:13 p.m. in Frankfurt. The company has lost 34 percent of its value since the scandal became public on Sept. 18.

After installing software designed to fool U.S. pollution testers since 2009 and covering it up for almost a year, Volkswagen faces costs and lost revenue from its damaged image of more than 35 billion euros ($39.6 billion), Warburg Research estimates. The company has said 6.5 billion euros it set aside won’t be enough to cover costs linked to the cheating. The committee investigating Volkswagen’s diesel cheating meets in Wolfsburg, the company’s headquarters city, on Tuesday, the minister said.

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