Switzerland may ban Volkswagen diesel car sales – MarketWatch

Posted: Monday, September 28, 2015

ZURICH–Switzerland is considering banning the sale of diesel cars made by Volkswagen AG in the wake of the emissions rigging scandal that is rocking Europe’s biggest car maker.

The ban, by the Swiss Federal Roads Office, would be on all Volkswagen group cars with diesel engines that contain software designed to cheat pollution controls and includes its VW, Audi, Skoda and Seat brands.

“We will make a decision on Monday based on information we receive from Volkswagen,” said Thomas Rohrbach, spokesman for the Federal Roads Office.

The Swiss estimate that around 180,000 Volkswagen group vehicles already on its roads could contain the software which reduces pollution levels during testing. The cars have 1.2-liter, 1.6-liter and 2.0-liter diesel engines and have met the EURO5 emissions standard.

These cars, which were built between 2009 and 2014, could be subject to a recall if they are found to contain the manipulation software, Mr. Rohrbach said.

Sales of new vehicles of this type would be banned, but the prohibition wouldn’t extend to the cars already on the roads or vehicles with the newer EURO6 emissions standard.

The move would be the latest blow for Wolfsburg-based Volkswagen that has lost around a third of its market value since the emissions-testing crisis emerged.

On Friday the auto maker confirmed the appointment of Porsche chief Matthias Müller as it new chief executive after his predecessor, Martin Winterkorn resigned in the wake of the scandal.

Mr. Winterkorn came under pressure after the car maker admitted that software used to dupe environmental regulators in the U.S. and Europe was installed on more than 11 million cars that are now possibly subject to a global recall.

According to the U.S. authorities, roughly 482,000 cars in the country were fitted with software that covertly turns off when driving normally, and turns them on when the car is undergoing an emissions test.

Known as a “defeat device,” the feature results in cars emitting up to 40 times the amount of toxic nitrogen oxide emissions than the standards allow.

Volkswagen has issued a profit warning and disclosed a EUR6.5 billion ($7.27 billion) charge to earnings to cover the costs of addressing the matter, although U.S. fines could be much higher.

On Friday, new CEO Mr. Müller vowed to get to the bottom of the affair that has shattered trust in the company and raised questions about the future of diesel cars for the auto industry in general.

“My most urgent task is to win back trust for the Volkswagen group,” he said. “Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry.”

Write to John Revill at john.revill@wsj.com

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