VW Sets Aside $18.2 Billion for Diesel Cheating Provisionsby
Most of the 11 million affected diesel cars still on the road
Engine manipulation sent shockwaves across the car industry
Volkswagen AG raised provisions to pay for the emissions-cheating scandal and slashed its dividend to preserve cash, a major step toward recognizing the fuller financial impact of the worst crisis in the German automaker’s history.
VW increased the amount set aside to cover the costs of the cheating to 16.2 billion euros ($18.2 billion) from a previous estimate of 6.7 billion euros, Europe’s largest carmaker said in a statement on Friday. Volkswagen cut the proposed annual dividend to 0.17 euros per preferred share, from 4.86 euros per share last year, after reporting an operating loss of 4.1 billion euros for last year, compared to 12.7 billion euros in 2014.
The shares traded down 3.7 percent to 122.35 euros at 3:06 p.m. in Frankfurt. Since the scandal broke in September, Volkswagen has lost more than 12 billion euros in market value. Deliveries this year will be unchanged from last year’s level, the carmaker said.
The carmaker will report full details of its earnings on April 28. It delayed the release, originally scheduled for March 10, because of the difficulty of quantifying the full cost of the cheating. Software designed to rig exhaust systems is still installed in some 11 million of its diesel-powered cars worldwide, and a recall in Europe started earlier this year.