The Volkswagen AG on Monday lost about $16.9 billion from its stock market value, about 19%, following the revelation about its scandal on the emission tests. With the company’s reputation damaged, the fall in the market value is the lowest for Volkswagen in three years, with sales faltering in China and the US.
Volkswagen has been proved to have rigged the software in its ‘clean diesel’ cars. The manufacturer has made extensive set ups to make sure that the pollution controls of the cars worked only when they were subjected to regulating tests. During normal use, the Volkswagen cars had continued emitting smog forming hazardous nitrogen oxides in nearly 40 times the allowed levels, which clearly violates the Clean Air Act.
Martin Winterkorn, the CEO of Volkswagen, has apologized profusely and has pledged that the company will pay the costs for its actions. Following the revelation of the cheating, the US sales of Beetle, Golf, Jetta and Passat models for 2015 and 2016 in the US have been halted. The number of such rigged models sold in the last seven years touch 500,000 now, and every one of them will have to be recalled for repair. The fine for each car could go up to $37,500. Also, if the regulatory board decides that Volkswagen should need to answer a case, the amount of fines could multiply. Though the discovery about the deception in the emission controllers were pointed out last year, it was only this month that the automaker acknowledged such conduct.
Volkswagen was the world’s top selling auto maker in the first half of the year, seconded by Toyota. The German auto maker was caught in a similar cheating scandal forty one years ago. The company then had deactivated parts of the emission control system in 1973 vehicles and paid $120,000 as fine against the charges.
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