VW Shares Jump As Fuel Consumption Problem Overstated.
“the (estimated) impact of 2 billion euros will in fact end-up being materially lower”
WOLFSBURG, Germany – Volkswagen shares spurted in Europe, after the company announced it had overstated its earlier admission that fuel consumption false data had affected 800,000 cars.
The true figure is less than 40,000, VW said.
“Following extensive internal investigations and measurement checks, it is now clear that almost all of these model variants do correspond to the CO2 (fuel economy) figures originally determined. This means that these vehicles can be marketed and sold without any limitations. The suspicion that the fuel consumption figures of current production vehicles had been unlawfully changed was not confirmed. During internal re-measurements slight deviations were found on just nine model variants of the Volkswagen brand,” VW said in a statement.
VW shares jumped almost six per cent to just over 140 euros in European trading.
VW said last month it had falsified fuel usage and CO2 emissions in about 800,000 cars sold mainly in Europe, and was expecting costs of at least 2 billion euros ($2.2 billion) including compensation payments to customers.
Volkswagen said today it presented these results to the investigation commission of the German government. The figure of approximately 800,000 vehicles under suspicion originally published by Volkswagen has not been confirmed, it said.
“The deviations found in the figures for only nine model variants amount to a few grams of CO2 on average, corresponding to increased cycle consumption in the NEDC of approximately 0.1 to 0.2 litres per 100 kilometres. With an annual production of approximately 36,000 vehicles, these model variants correspond to around only 0.5 per cent of the volume of the Volkswagen brand.,” VW said.
Its Audi, Skoda and Seat subsidiaries have also agreed a similar procedure with the government.
“Customers’ real-world consumption figures do not change and neither are any technical vehicle modifications necessary. Against this background, the negative impact on earnings of €2 billion that was originally expected has not been confirmed,” the statement said.
Investment researcher Evercore ISI said the news was positive for VW.
“Whilst we note cautionary language within the VW release, particularly with respect to confirmation of the impact on earnings, clearly the tone of the release is positive and infers that fewer cars are impacted than had originally been anticipated with respect to the CO2 issue. We view this as positive and suspect that the previously guided for negative earnings impact of 2 billion euros will in fact end-up being materially lower,” Evercore ISI analyst Arndt Ellinghorst said.
The much bigger problem with diesels though remains intact.
VW’s board is currently meeting in Wolfsburg.