2014 Porsche Cayenne. Porsche Canada says stop-sale order affects 2014 through 2016 Cayenne diesels until further notice.
The Canadian units of two Volkswagen AG luxury brands have halted sales of vehicles with 3.0-litre diesel engines as the scandal battering the Germany-based auto maker grows.
Porsche Cars Canada Inc. has halted sales of diesel versions of its hot-selling Cayenne SUV and Audi Canada Inc. has stopped sales of several models after the U.S. Environmental Protection Agency (EPA) said Volkswagen did not inform it that the engine contained so-called "defeat devices" that enabled the auto maker to cheat on emissions tests. Volkswagen has denied that accusation but has halted North American sales of vehicles equipped with 3.0-litre diesels.
Also, Volkswagen Canada Inc. said that it has stopped the sale of diesel-equipped Touareg sport utility vehicles.
The stop-sale order affects 2014 through 2016 Cayenne diesels until further notice, Porsche Canada said in a statement. "We are working intensively to resolve this matter as soon as possible," the statement said.
The Audi action affects 2013-15 Q7 models and 2014-16 A6, A7, A8 and Q5 models equipped with the engine.
"This is a voluntary action to allow time for Volkswagen Group to settle this matter fully with the EPA," Audi Canada said.
VW has acknowledged that software that shuts off smog-reducing equipment during regular driving but turns it on during regulatory tests was installed on 11 million vehicles.
The crisis has led to firings and resignations of senior executives, angered consumers and made the auto maker liable for fines and penalties likely running into the billions of dollars. The move to halt sales of vehicles comes one day after Volkswagen said it had overstated the fuel economy of 800,000 vehicles in Europe.
The scandal first broke in September and sent Volkswagen Canada Inc. sales skidding 20 per cent that month from year-earlier levels. They bounced back 8 per cent last month from October, 2014, results. Porsche has been the second-strongest brand in the Canadian market this year with a 31-per-cent gain that has been surpassed only by the Mini. Audi's sales increase of 12 per cent has outperformed the overall market increase of 2.5 per cent but Audi sales tumbled 13 per cent in Canada in October.
"Another week, another shock in the VW story," said Exane BNP Paribas analyst Stuart Pearson.
The EPA actions contributed to a credit-rating downgrade of VW's debt by Moody's Investors Service. "These new claims pose further challenges to Volkswagen's financial flexibility and competitive position and heighten Moody's concerns about Volkswagen's internal control and governance issues, thus further weakening its rating profile," Yasmina Serghini, Moody's lead analyst for VW, said in a statement Wednesday.
Standard & Poor's said the news does not affect its ratings because VW is already on credit watch with negative implications. "This development nevertheless extends and deepens the scope of the risks and costs facing the company, beyond the manipulation of nitrogen oxide emissions in diesel engines, and demonstrates the wide-ranging negative credit consequences facing the company," S&P said in a news release.
With files from Reuters