Fitch ratings agency on today cut Volkswagen's credit rating by two notches, saying that a widening pollution cheating scandal had exposed weak corporate governance in the German auto giant.
"The downgrade to 'BBB+' reflects the corporate governance, management and organisational issues highlighted by the ongoing emission test crisis," said Fitch in a statement.
"We believe that the emergence of a fraud of this magnitude going either unnoticed or uncorrected by top management for so long is not consistent with a rating in the 'A' category," it added.
The agency also put VW on negative watch, saying that changes made to its management since the beginning of the scandal "have been limited and do not seem to reflect a fundamental determination by the company to overhaul its corporate governance and culture".
Last week's revelations that the cheating was not only limited to nitrogen oxide but also carbon dioxide emissions also give rise to "the possibility of further problems still to be uncovered", said Fitch.
VW is engulfed in a huge pollution scandal that was initially centred on so-called defeat devices -- sophisticated software fitted into diesel engines to skew the results of tests for nitrogen oxide emissions.
The carmaker has admitted to fitting 11 million diesel engines worldwide with the rogue software, triggering both regulatory and criminal investigations in several countries, including Germany and the United States.
But last week, Volkswagen revealed that beyond the nitrogen oxide issue, it had also understated carbon dioxide emissions of 800,000 vehicles.
