VW close to fixes for dirty diesel motors in Europe

The carmaker is facing an emissions scandal on three fronts: cheating software, irregular carbon dioxide ratings and questionable emissions software.

Volkswagen is closing on regulatory approval for a series of low-cost fixes to 8.5 million rigged diesel vehicles in Europe, a step forward in its effort to overcome a scandal over cheating on emissions.

The proposals for the three affected engines have been submitted to German motor vehicle agency KBA and have made a "positive" impression on regulators, Transport Minister Alexander Dobrindt said in an emailed statement Monday. Germany is responsible for approving those vehicles in Europe, and the final go-ahead there would provide a template for a recall across the region.

"We are working as quickly as possible to clear up the manipulation and allow Volkswagen to remedy it," Dobrindt said in the statement.

After equipping some diesel cars with technology to circumvent emissions test, VW has proposed software updates for rigged 1.2- and 2.0-liter engines. For the 1.6-liter motors, the automaker has proposed to add an air filter, avoiding more costly changes to engine components. The plan would allow the company to start a European recall in January.

The shares rose 4.7 percent to 129.70 euros at 2:51 p.m. in Frankfurt. Volkswagen has climbed 50 percent from its intraday low of 86.36 euros on Oct. 5 in the wake of the scandal.

The most important next step will be as and when VW will conclude its internal investigations.

Arndt Ellinghorst, a London-based analyst for Evercore ISI

A program the company set up to encourage whistle-blowers expires Monday, and VW plans to present interim results of its internal inquiry in mid-December.

The carmaker is facing an emissions scandal on three fronts: cheating software it installed in about 11 million cars worldwide; irregular carbon dioxide ratings on about 800,000 vehicles in Europe; and additional questionable emissions software in about 85,000 VW, Audi and Porsche cars with 3.0- liter diesel engines in the U.S. Approval of repairs in Germany, and by extension the rest of Europe, doesn't guarantee a thumbs- up in the United States, where regulators first uncovered Volkswagen's diesel deception.

For the smaller diesels, the German manufacturer has submitted a plan to repair nearly half a million cars to U.S. regulators. A response is due in December. For the bigger diesels, the company plans to alter the questionable software, known as an auxiliary emissions control device, and resubmit it for approval.