German automaker Porsche – a Volkswagen subsidiary – has said it would discontinue sales of its Cayenne diesel vehicles to US and Canadian markets. The decision is a further fallout from VW’s emissions cheating scandal.
Porsche’s North American unit said it was discontinuing sales of the 2014-2016 model Cayenne diesel sport utility vehicles until further notice, citing allegations by US regulators that “defeat devices” had been installed in Porsche and Audi models with 3.0 liter and larger diesel engines.
The development is part of a wider scandal that had initially centered on software on up to 11 million diesel vehicles worldwide, which the German auto giant had admitted understated actual emissions of pollutants, including nitrogen oxide.
“VW is leaving us all speechless,” said Arndt Ellinghorst of banking advisory firm Evercore ISI. “It seems to us that this is another issue triggered by VW’s internal investigation and potentially related to Europe.”
VW says 800,000 vehicles affected
VW said it would immediately start talking to “responsible authorities” about what to do about the latest findings by US regulators.
“From the very start I have pushed hard for the relentless and comprehensive clarification of events,” Volkswagen Chief Executive Matthias Müller said in a statement. “We will stop at nothing and nobody. This is a painful process but it is our only alternative.”
Audi, another unit of VW, claimed on Tuesdayit had not installed defeat devices in its models and had scheduled meetings with regulators in the US state of California next week to give answers.
Porsche had already cut its earnings outlook as a result of the scandal; it said it was sticking with its current forecast for post-tax profit of up to 1.8 billion euros ($1.97 billion dollars).
“Volkswagen has done a disservice to German industry,” Ulrich Grillo, the head of the Federation of German industries (BDI), told reporters on Tuesday. He called on the firm to clear up the scandal quickly for the sake of the industry as a whole.
VW is under immense pressure to identify those responsible for engineering the cheating and recall affected vehicles to install fixes. It has come under fire from lawmakers, investors and analysts for its sluggish response.
“VW keeps touting utmost transparency but they really should have put all the cards on the table,” said Stefan Bratzel of the Center of Automotive Management think-tank near Cologne. “There is a lot of need for explanation, from Audi too.”
Investors have also criticized the appointment of Müller as group CEO, questioning whether a veteran company insider was the right person take the helm as the company weathers the crisis.