Volkswagen to change tech it uses to control emissions

Volkswagen said on Tuesday that it would revamp the technology it uses for controlling diesel emissions, as it struggles to overcome an emissions cheating scandal that has battered its reputation and threatened its financial stability.

The company said it would switch to a selective catalytic reduction system to decrease emissions on its diesel engines in Europe and North America, where the scandal erupted last month. The measure affects new cars and is not part of its plan to fix those already in circulation, said Peter Thul, a spokesman for Volkswagen.

Volkswagen, Europe's leading automaker, was forced to admit that roughly 11 million of its diesel cars worldwide were equipped with software that allowed it to cheat on tests of noxious gas emissions. The company now faces a raft of investigations in the United States, Europe and China.

"Diesel vehicles will only be equipped with exhaust emissions systems that use the best environmental technology," Herbert Diess, chairman of the company's passenger car brand, based in Wolfsburg, Germany, said in a statement. The change will take place "as soon as possible," according to the statement.

Last week, Volkswagen submitted a detailed proposal to the authorities here of how it planned to remove the software from its vehicles in Germany. The Federal Motor Transport Authority is reviewing Volkswagen's proposal to remedy the issue on its 1.2-, 1.6- and 2-litre diesel engines.

The German Transport Ministry has said there will be a recall for affected vehicles, with a software fix for the 2-liter engines expected to be ready early next year. The 1.6-liter motors, however, would require further modifications that cannot be expected before later in 2016. No information has been released regarding a fix for the 1.2-litre engines.

Fallout from the scandal has ricocheted throughout Germany, Europe's largest economy, with a benchmark survey released on Tuesday showing that economic sentiment dropped more than expected in October, to 1.9 points from 12.1 in September.

"The emissions scandal at Volkswagen and sluggish growth in emerging markets are dampening the economic outlook for Germany," the ZEW research institute, which conducts the monthly survey, said in a statement.

Volkswagen also said that it would cut investments at its leading brand by euro 1 billion, or about $1.1 billion, an indication of how costly the scandal might be.

Last week, Matthias Müller, Volkswagen's new chief executive, said the automaker would require more than the euro 6.5 billion it had initially set aside to bring vehicles with illegal software into compliance with emissions standards, but he added that it was too soon to provide a new estimate.

On Tuesday, Werner Hoyer, the head of the European Investment Bank, said the institution was checking to see whether Volkswagen had violated its agreements to uphold certain environmental goals.

Speaking to the German newspaper Süddeutsche Zeitung, Hoyer said that he was "very disappointed" by Volkswagen's actions and that the institute he leads would conduct "very thorough investigations" into how the automaker spent the estimated euro 4.6 billion it borrowed from the bank since 1990 for the development of engines with lower emissions.

In case of impropriety, he said, the investment bank would consider demanding that the loans be repaid.

©2015 The New York Times News Service