Investors wiped another 4 billion euros ($4.4 billion) off Volkswagen's market value after fresh admissions from the carmaker. As David Pollard reports, it threatened to make a serious dent in car sales for the first time since a test-cheating scandal erupted.
It's the scandal that keeps on giving. Or for VW, taking away - close to another ten per cent lopped off its share price today. On revelations the carmaker understated fuel consumption figures for up to 800,000 cars. This time, the admission was made by the company itself. On Tuesday, US regulators alleged that three litre engines used in VW, Porsche and Audi models could also be implicated in emissions cheating. IG market analyst, Alastair McCaig. (SOUNDBITE) (English) IG MARKET ANALYST, ALASTAIR MCCAIG, SAYING: "The markets have been waiting for the other shoe to drop as far as Volkswagen is concerned, and maybe it's just a bit of a surprise that it's taken this long. The fact that it's migrated into their petrol division as well will be even more a worry for the automotive industry as a whole, because it will ensure the scrutiny remains on the whole sector." While adding new worry for VW. That sales to fuel-economy-conscious consumers who weren't perhaps so worried by emissions could take a hit. As well as driving up the scandal's final bill. (SOUNDBITE) (English) IG MARKET ANALYST, ALASTAIR MCCAIG, SAYING: "The 6.5 billion euros that they initially set aside was never going to be sufficient. The further two billion they've added to that seems pretty much on the low side as well, especially when you consider the possibility for a broad array of further costs emanating from this." In the meantime, Sigmar Gabriel has leapt to VW's defence. VW is, says the German economy minister, serious about clearing up the scandal. And despite the share price tumble, one view here at the German stock exchange is that the scandal is manageable. And if anything, could profit Germany's other car industry giants, BMW and Mercedes.