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VW Diesel Scandal Cost Rises To £12.7bn

Volkswagen (LSE: 0P6N.L - news) has revealed the deepening cost of the diesel emissions scandal as concerns over irregularities found in other global car makers widened.

VW has increased the sum it has put aside for the scandal to €16.2bn (£12.7bn) - up from €6.7bn (£5.2bn) - helping it slump to an annual net loss of €5.5bn (£4.3bn) for 2015.

Meanwhile, the German government said a probe sparked by the scandal had found anomalies in 16 global brands - though the "defeat device" technology used by VW was not found in other car makers.

Volkswagen's loss compared to a profit of €2.5bn (£1.9bn) in 2014. It (Other OTC: ITGL - news) has not reported a loss since 1993.

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It follows the damaging admission last autumn that it used software to cheat on emissions tests - affecting 11 million vehicles worldwide.

VW said that thanks to the scandal, as well as tough global economic conditions, it expects sales for the group this year to be as much as 5% lower than 2015's €213.3bn (£166.8bn).

It also said it was holding back part of the bonuses for top executives. The release of findings from an investigation VW commissioned from a US law firm has been been pushed back.

The car maker admitted it was still not able put a total figure on the cost of cleaning up the scandal - a day after agreeing to a deal with US authorities covering nearly 500,000 vehicles to compensate owners or buy back their cars.

The settlement is predicted to cost $10bn (£7bn). Volkswagen still faces a US criminal investigation.

The deal has prompted pressure for fair treatment for drivers in Europe, a market that is much bigger than the US for Volkswagen.

Downing Street said Transport Secretary Patrick McLoughlin had pressed VW over the treatment of UK motorists.

In Germany, transport minister Alexander Dobrindt revealed irregularities found in 16 car brands after a government probe.

Five German brands have agreed to recall 630,000 diesel vehicles in Europe.

They include Volkswagen as well as its subsidiaries Audi (LSE: 0FG8.L - news) and Porsche, plus Mercedes (Xetra: 710000 - news) and Opel.

The recall aims to reset technology - which is legal - that turns off emission controls at certain temperatures.

Other brands named by Mr Dobrindt where irregularities were found were Renault (LSE: 0NQF.L - news) , Alfa Romeo, Chevrolet, Dacia, Fiat (Hanover: FIA1.HA - news) , Hyundai, Jaguar, Jeep, land Rover, Nissan and Suzuki.

In the US, Germany's Daimler - maker of Mercedes - and Mitsubishi are facing investigations .

Daimler (LSE: 0NXX.L - news) , said it had been contacted by the Justice Department last week over "possible indications of irregularities".

The company is conducting an internal investigation.

Mitsubishi (LSE: 7035.L - news) faced calls from the US National Highway Traffic Safety Administration for fuel economy data after it confirmed earlier this week that its staff rigged fuel economy tests.

Elsewhere, Peugeot Citroen offices in France were raided and items seized in relation to pollutants - with the company insisting it complied with all regulations.

Meanwhile in the UK, the Government has revealed that all diesel cars it tested in the wake of the VW scandal exceeded laboratory pollution limits when looked at in real-world conditions (Other OTC: UBGXF - news) .