Volkswagen has increased the amount of money it deems necessary to cover expenses from its diesel emission test manipulation scandal by €9.5 billion (£7.2 billion) to €16.2 billion (£12.2 billion), according to chairman Matthias Mueller.
The increase, announced during a press conference in Wolfsburg on Friday, comes after the German car maker informed shareholders late last year that it was setting aside €6.7 billion (£5 billion) for potential costs, including a sweeping recall of diesel-powered Volkswagen models.
Volkswagen has also announced that it will not, as it earlier promised, meet its deadline for the official report into dieselgate by the end of April. It said that its law firm Jones Day expects to conclude the investigation by the fourth quarter. It added that the disclosure of the interim results of the report at this point "would prevent unacceptable risks for Volkswagen and, therefore, cannot take place now".
The more than doubling of financial provisions for the diesel emission test manipulation scandal pushed Volkswagen to a pre-tax loss of €1.3 billion (£1 billion) in 2015 – the largest loss in the company history. This compares to a pre-tax profit of €14.7 billion for the previous year, 2014.
Volkswagen’s chief financial officer, Frank Witter, said the emissions issue would dominate the company’s agenda this year.
"We are again operating in an exceedingly challenging environment in which global demand for new vehicles is declining, exchange rates and interest rates remain highly volatile and competition in many of our markets is intensifying," he said.
Volkswagen said it expected sales across the group, which includes Audi, Bentley, Bugatti, Lamborghini, Seat and Skoda, to fall by up to five per cent in 2016.
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