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French probe alleges 2 million PSA cars had engine cheats

PARIS — A French investigation into alleged emissions cheating by PSA Group found that suspect software had been used on almost 2 million vehicles sold by the maker of Peugeot and Citroen cars, Le Monde reported on Friday. Paris-based PSA denies any use of fraudulent engine software, a spokesman said in response to the newspaper report, which sent PSA shares sharply lower. The stock was down 4.4 percent at 17.78 euros as of 1019 GMT. So-called "defeat devices" restrict exhaust output of toxic nitrogen oxides (NOx) under regulatory test conditions while letting emissions far exceed legal limits in real-world driving. In February, PSA became the fourth carmaker to be referred to French prosecutors by the country's DGCCRF watchdog over suspected emissions test-cheating, after Volkswagen, Renault and Fiat Chrysler. PSA's engineering chief acknowledged at the time that emissions treatment in the group's diesels was deliberately reduced at higher temperatures to improve fuel efficiency and carbon dioxide (CO2) emissions in out-of-town driving, where NOx output is considered less critical. According to Le Monde, an internal PSA document obtained by DGCCRF investigators includes discussion of the need to "make the 'defeat device' aspect less obvious and visible." However PSA insists there is nothing fraudulent or illegal about its engine calibrations. "PSA denies any fraud and firmly reaffirms the pertinence of its technology decisions," the company said on Friday. Reporting by Laurence FrostRelated Video: Image Credit: Getty Government/Legal Green Volkswagen Citroen Peugeot Emissions Diesel Vehicles dieselgate volkswagen diesel

VW stock plummets as Euro markets open

The fallout from Volkswagen's installation of an emissions "defeat device" on nearly 500,000 diesel-fueled models in the US is already hitting the automaker hard on the German stock exchange. At one point, the share price plummeted 23 percent to erase the equivalent of $17.6 billion in value. Things eventually bounced back slightly to a still severe 19.23 percent loss, according to Bloomberg as of this writing. The scandal couldn't come at a worse time for chairman Martin Winterkorn. The VW supervisory board takes up the issue of renewing his contract on September 25, Bloomberg reports. If things get bad enough, the door could be open for a new boss to step in. Dealers in the US might start feeling the pain from this, as well. Affected 2015 VWs that are still at showrooms are now under a stop sale. Until the issue is straightened out, the Environmental Protection Agency isn't certifying the company's 2016 diesel models with the 2.0 TDI, either. The diesel emissions problem was first discovered by research from West Virginia University and the International Council on Clean Transportation. In some cases, the engines can produce 40 times more nitrogen oxides than allowed. The automaker could be on the hook for $18 billion in fines for the breach, but the actual figure is expected to be lower. In response, Winterkorn has issued a public apology and ordered an independent investigation into what happened. The EPA and California Air Resources Board have also been looking into the situation. This could become an international problem, though. According to The Detroit News, European authorities might begin similar inquires to check the automaker's diesel emissions there.

Volkswagen profit jumps as it warns of a cooling auto market

FRANKFURT, Germany — Volkswagen says its profits jumped 44% in the third quarter thanks to a more profitable mix of vehicles in its lineup but warned that global car markets are slowing more than expected and lowered its forecast for annual sales. After-tax profit rose to $4.42 billion (3.98 billion euros) as revenues rose 11% to $68.27 billion (61.42 billion euros). The sales margin of 7.8% exceeded the goal of 6.5-7.5% as vehicles bringing higher profits took a larger share of sales. The Wolfsburg-based automaker pointed to the headwinds facing the industry by saying that it expects "vehicle markets will contract faster than previously anticipated in many regions of the world." It said sales would be "on a level" with last year's record of 10.8 million vehicles. Previously it had expected a slight increase. The company said its profits would be in the lower end of its forecast range. Global automakers are facing a slowdown in sales amid disputes over trade and from pressure in the European Union and China to develop and sell low-emission vehicles that require heavy investment in new technology. Ford and Renault have issued profit warnings in recent days, while Daimler, maker of Mercedes-Benz luxury cars, lost money in the second quarter and is expected to outline a cost-cutting strategy for investors on Nov. 14. Volkswagen is leading the push into electric vehicles in Europe by launching its ID.3 battery-powered compact car at prices it says will make zero local emission vehicles a mass phenomenon. The company was able to increase earnings in the quarter despite an 18% rise in spending on research and development.