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Volkswagen picks company veteran to tackle crisis

Volkswagen is under huge pressure to take decisive action over the biggest business-related scandal in its 78-year history

Diesel cars loiter in lots as VW dealers, owners sit and wait

Reuters
Volkswagen named company veteran Matthias Mueller as its chief executive on Friday as the German carmaker struggles to get to grips with a crisis over rigged diesel emission tests that its chairman called "a moral and political disaster."

After a marathon board meeting at its headquarters in Wolfsburg, the world's biggest automaker said Mueller, the 62-year-old head of its Porsche sports car division, would replace Martin Winterkorn, who resigned as CEO on Wednesday.

As Mueller took the helm, however, Germany's transport minister announced the carmaker had manipulated test results for about 2.8 million vehicles in the country, nearly six times as many as it has admitted to falsifying in the United States, pointing to cheating on a bigger scale than previously thought.
 

Volkswagen, for generations a model of German engineering prowess, is under huge pressure to take decisive action over the biggest business-related scandal in its 78-year history.

"Under my leadership, Volkswagen will do all it can to develop and implement the strictest compliance and governance standards in the whole industry," Mueller said in a statement.

The company said it would appoint a US law firm to conduct a full investigation, suspend an unspecified number of staff and adopt a more decentralised structure with a slimmed down management board.

But the scandal keeps growing. German transport minister Alexander Dobrindt said on Thursday Volkswagen had also cheated tests in Europe, where its sales are much higher than in the United States. On Friday Dobrindt put the number of affected vehicles in Germany at 2.8 million.

Regulators and prosecutors across the world are investigating the scandal, while customers and investors are launching lawsuits.

The wider car market has been rocked too, with manufacturers fearing a drop in sales of diesel cars and tougher testing.

Regulators in Europe and the United States said they would take a harder line on enforcing compliance with pollution standards and would be less tolerant of gaps between real world emissions and laboratory results.

Volkswagen said on Tuesday 11 million vehicles worldwide were fitted with the software that allowed it to cheat US tests, while adding it was not turned on in the bulk of them.

Customers and motor dealers are furious that Volkswagen has yet to say which models and construction years are affected, and whether it will have to recall any cars for refits.

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First Published: Sep 26 2015 | 9:08 PM IST

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