The Volkswagen emissions-testing scandal is deepening, with authorities in France and Italy launching investigations into the embattled German carmaker.



Italy’s competition regulator is to investigate whether VW engaged in “improper commercial practices” by promoting its vehicles as meeting emissions standards which it failed to reach without a “defeat device”.

The inquiry involves Volkswagen, Audi, Seat and Skoda diesel vehicles sold between 2009 and 2015. VW has suspended the sale of affected vehicles in Italy, and has said it will recall more than 650,000 vehicles in the country.

In France, an official from the prosecutor’s office told Reuters that an inquiry had been opened. The French magazine L’Express said this had been launched at the instigation of Pierre Serne, vice-president of the region Île-de-France responsible for transport.

It also emerged on Friday that other car manufacturers – BMW, Chrysler, General Motors, Land Rover and Mercedes-Benz – are under scrutiny from the US regulator that exposed Volkswagen’s manipulation of emissions tests.



The Environmental Protection Agency (EPA) has broadened its investigation to include at least 28 diesel-powered car models made by those companies, according to the Financial Times.

VW has admitted to the US regulator that it fitted up to 11m vehicles worldwide with software that manipulates the tests. Its chief executive, Martin Winterkorn, has stepped down and is facing a criminal investigation in Germany, along with other, unnamed, employees of the carmaker.

The EPA will initially test one used vehicle of each model and then widen the enquiry if it finds anything suspicious, a senior agency official close to the investigation told the FT.



The investigation will include most of the diesel vehicles on American roads, such as BMW’s X3, Chrysler’s Grand Cherokee, GM’s Chevrolet Colorado, the Range Rover TDV6 and the Mercedes-Benz E250 BlueTec. Diesel engines make up a tiny proportion of the overall car market in the US, but are far more common in Europe.

BMW has rejected allegations that it cheated emissions tests.

About 2.8m Volkswagen vehicles are affected in Germany, nearly 1.2m in the UK and 482,000 in the US. The software detected when a diesel car was being tested and switched on controls to cut emissions. On the road, cars were found to be emitting up to 40 times the permitted level of nitrogen oxide.

Former UK science minister Lord Drayson has admitted that the Labour government’s support for diesel cars was a mistake, and warned that diesels were “literally killing people”.

Luc Simoncini, of Kames Equity Investment, said: “Car manufacturers could be tarnished for some time, irrespective of the individual merit of each company. The scandal currently hurting VW echoes eerily of the scandals which tarnished big banks at the peak of the financial boom.”

He advised investors to stay away from the auto sector for the time being, saying there are enough other investment opportunities. “For the auto industry, it is still unclear what the response of regulators across the world will be, especially around the implementation of new tests. In addition, the long term case for diesel engines for compact cars could be in jeopardy and could impact the fundamental valuation of most players in the sector.”

Tax specialists Baker Tilly noted that HMRC, and British taxpayers, could be losers in the scandal. At this stage it is unclear whether the software used by VW to manipulate tests lowered CO2 as well as nitrogen oxide emissions. UK vehicle duty and benefit in kind tax are based on CO2 emissions, so lower emissions mean that less tax is collected from the driver.

Bill Longe, of Baker Tilly, said: “If it is eventually proven that the VW software did lower CO2 ratings, then HMRC – and ultimately UK taxpayers – will feel quite rightfully cheated out of much-needed revenue.”

The firm also questioned whether a tax break on diesel cars due to be announced in 2016 could be shelved.