Shares in Volkswagen suffer their biggest ever one-day fall in early Monday trading after U.S. authorities accused the German carmaker of falsifying emissions data. As Ivor Bennett reports, VW could face penalties of up to $18 billion.
Green hills, lush vegetation - it was all about being clean. But looking back at the marketing now just makes things so much worse. Volkswagen's so-called clean diesel cars apparently not that clean after all. On models including the Beetle, US authorities say VW falsified emissions data. Masking levels during testing, but pumping out up to 40 times the allowed pollutants on the road. An offence that could land them an 18 billion dollar fine. CEO Martin Winterkorn has apologised and ordered an investigation. But it didn't stop shares plunging more than 20 percent in early trading - their biggest ever one-day fall. And Matthew Beesley from Henderson Global Investors says the impact could go way beyond that. (SOUNDBITE) (English) HEAD OF GLOBAL EQUITIES, HENDERSON GLOBAL INVESTORS, MATTHEW BEESLEY, SAYING: "The risk is that the diesel businesses for all manufacturers, all car manufacturers globally, will be tarnished. So whereas right now this is a problem for VW in the US, this could become a problem for VW globally and indeed it could become a problem for diesel manufacturers globally as well." The glitz of the Frankfurt car show normally gives manufacturers a boost around now. But the scandal is already having the opposite effect, says Baader Bank's Stefan Scharffetter. (SOUNDBITE)(German) STEFAN SCHARFFETTER, BAADER BANK, SAYING: "We are seeing falls in car shares everywhere today. It is affecting Daimler and BMW, not as much as VW of course, so there is a lot of uncertainty about what is happening here in the car branch in Germany and what will happen now." It was all smiles for VW in Frankfurt last week Five months on from a leadership crisis, a supervisory board meeting this week was finally expected to outline the way ahead. But it's now got a much bigger problem.