German carmaker Volkswagen capped two grim days for the country's auto industry by revealing its diesel emissions cheating cost it a chunky 16.2 billion euros (USD 18.2 billion) for 2015 alone and that's likely only a part of the total bill.
The revelation last September from US environmental authorities that the company had been cheating on emissions test rocked one of the most venerable brand names in the auto industry and cost it its chief executive as well as a host of goodwill.
It's also raised questions over the practices of others.
Today, German government officials said five German brands, including Volkswagen, would conduct a voluntary recall over emissions issues, a day after Mercedes-Benz owner Daimler said it was conducting an internal investigation into its emissions certifications at the request of US authorities.
The Volkswagen announcement follows agreement in a US federal court in San Francisco on the outlines of a deal with US environmental authorities.
Under the terms of the proposed deal, Volkswagen would offer to buy back almost 500,000 cars sold in the US equipped with software that disabled emissions controls when the car was not being tested. Some 11 million cars worldwide are affected.
The company had delayed its earnings announcement until it could get a better estimate of the costs involved. Now that it has revealed the cost of the scandal, Volkswagen said Friday that it is to post a massive net loss of 5.5 billion euros for last year.
The writedown of 16.2 billion euros is more than double the 6.7 billion euros the company had previously estimated. Analysts at Warburg Research think direct cost of fines, recalls and settlements worldwide will end up reaching 28.6 billion euros for fines and that's excluding any impact on sales and market share.
