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VW: Crisis Over?

26 November 2015 by lberuti

VW ( Volkswagen AG ) said yesterday that they would be able to bring their diesel cars into line with European clean-air standards by updating engine software for most cars and by installing a so-called flow straightener tube for those with a 1.6-litre motor. VW said it will launch the repair campaign in January and should complete the recall by the end of 2016. The associated cost should run around €500mln. That is only a fraction of the money - €6.7bln - VW set aside to cover the cost of the scandal, and investors duly celebrated by sending VW’s 5 year risk premium 40bps lower to 183bps. VW has yet to come with a solution to comply with the stricter US emission laws though, and they still face major risks including fines by the US Environmental Agency and lawsuits by angry customers. There might still be a few more bumps along the road.