Diselgate: VW shares jump

Volkswagen Group shares have surged almost 20 per cent this week on news that fixing the bulk of the Dieselgate four-cylinder emissions-cheating cars would cost far less than previously estimated.

The embattled German car-maker this week gave the German transport department (KBA) its plan to recall and repair all of its affected 1.6- and 2.0-litre turbo-diesel four-cylinder engines.

It declared that its fix for the 1.6-litre engines would involve only software and some small pieces of air-intake hardware and would cost about €10 per car, while the recall for the 2.0-litre EA 189 engines will be even cheaper, taking less than half an hour to reflash the software.

Buoyed by planned fixes that should cost far less than the serious hardware modifications Volkswagen initially talked about, the German Stock Exchange jumped at the news, moving Volkswagen AG shares up from €115.99 a share yesterday (November 25) to close at €121.90. As recently as November 12, Volkswagen AG shares were trading at just €95.57 a share.

While it has yet to present a repair and recall plan for the 1.2-litre diesel engines, Volkswagen will deliver it by the end of November.

“Thanks to advances in engine development and improved simulation of currents inside complex air intake systems, in combination with software optimization geared towards this, it has been possible to produce a relatively simple and customer-friendly measure,” Volkswagen said in a statement yesterday.

“The objective for the development of the technical measures is still to achieve the applicable emission targets in each case without any adverse effects on the engine output, fuel consumption and performance.

“However, as all model variants first have to be measured, the achievement of these targets cannot yet be finally confirmed.”

Full rundown on Dieselgate news at motoring.com.au