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VW vows to win back public trust

News, 30 October 2015

WOLFSBURG: Volkswagen's new chief executive has promised a new spirit of openness as the embattled German automaker reported its first quarterly loss for 15 years.

Speaking to investors ahead of a trip to China with German chancellor Angela Merkel, Matthias Müller said the company would be "ruthless" in punishing those involved in the emissions scandal that has caused so much damage to the company's image.

Müller set out a five-point plan with a promise to put customers affected by the scandal at its heart while the company seeks to change its mindset and culture, the Guardian reported.

"We are leaving no stone unturned to find out what exactly happened and to make sure nothing like this ever happens again," he said. Professional services firm Deloitte has been hired to investigate those responsible.

Müller went on to say there will be a major reorganisation of the company's management structure with greater emphasis on local decision-making.

He also said a new strategy will be announced next summer that will map Volkswagen's direction over the next ten years to 2025 and this will include cuts to its product portfolio of more than 300 models. In addition, the company will focus more on electric cars.

Müller was speaking as the damaged automaker reported a third quarter operating loss of €3.48bn compared with almost the same level of profit (€3.2bn) for the same period last year.

Despite these figures and the €6.7bn it has been forced to set aside to cover the cost of recalling 11m vehicles, the company remained upbeat that the new plans would help to increase sales revenue by 4% this year.

However, adding to its difficulties, Indian cable channel CNBC-TV18 reported that Volkswagen is set to recall 100,000 cars after the country's vehicle regulatory body found the same "defeat devices" used to cheat emissions tests as elsewhere.

CNBC-TV18 said the recall is expected to happen before 8 November and is most likely to affect vehicles fitted with engines that have been imported. But 20,000 diesel vehicles made in India may also face recalls.

Data sourced from Guardian, The Drum, Reuters; additional content by Warc staff