VW suffers $3.9bn quarterly loss over emissions scandal

Volkswagen has announced its first quarterly loss in at least 15 years as it faces up to the mounting costs resulting from an exhaust emissions scandal that has rocked Europe’s biggest car maker.

The embattled German auto group reported on Wednesday a third quarter operating loss of about $3.9bn, compared with almost the same level of profit in the same period last year.

VW was also forced to set aside $7.4bn to cover the costs of the scandal, which was triggered by the group’s admission last month that it had installed software in its diesel-powered vehicles aimed at evading emissions test around the world.

“VW did some things that were wrong,” said VW brand chief Herbert Diess at the Tokyo Motor Show.

“On behalf of our entire company I would like to apologise sincerely,” said Diess, according to the Nikkei business daily.

Still, VW shares jumped more than three per cent in early trading in Frankfurt after reports showed that third quarter group turnover climbed to a higher-than-forecast $57bn, from $54.1bn last year.

The gain in the group shares helped the stock to recover some of the big losses it incurred after the car maker warned last month that about 11 million of its vehicles around the world were equipped with the emissions’ cheating software.

Prosecutors in several of VW’s major markets are considering legal action against the group as it prepares to launch in January a costly recall of vehicles that had been fitted with the software. That is expected to take until the end of the year to complete.

“We will do our utmost to regain lost trust,” said VW chief executive Matthias Mueller, who took over the post after his predecessor, Martin Winterkorn, stood down to take responsibility for the scandal.

Based in the northern German city of Wolfsburg, the VW group said it now expected its operating profit to fall “significantly below” last year’s record of $14bn.

Adding to VW’s woes, Wednesday’s figures also showed a slump in business in its key Chinese market following a slowdown in the Asian economy.

China’s contribution to VW’s results during the first nine months of the year was nearly four per cent lower than in the same period last year, VW said.

The scandal also threatens to cast a shadow over the 12 brands comprising the VW group, which includes luxury sports car maker Porsche, the premium brand Audi, as well as the core VW brand.