VW says 250,000 cars could be delayed by new testing rules

Volkswagen said production of up to 250,000 cars from its group brands in the second half will be delayed because of effects from new mandatory lab tests for emissions and fuel economy.

Implementation of the so-called Worldwide Harmonized Light Duty Vehicles Test Procedure (WLTP) on Sept. 1 for new cars will temporarily restrict the availability of some models and could affect working capital by driving up first-half inventories, Volkswagen (VW) said on Friday, without being more specific.

Carmakers are facing bottlenecks as they rush to get models through the more complex WLTP tests on a limited number of exhaust emissions test benches as they won't be able to sell new vehicles after Sept. 1 without the new carbon dioxide (CO2) emissions and fuel consumption readings.

"Because of the introduction of the new WLTP testing procedure, we expect in the second half of 2018 an effect at the VW group of around 200,000 to 250,000 vehicles that we will build later than originally planned," VW said.

Although effects on sales cannot be ruled out from the launch of WLTP which replaces the outdated New European Driving Cycle (NEDC) and aims to better reflect real-driving data, VW on Friday reaffirmed its goal for group deliveries to moderately exceed last year's record 10.7 million units.

"We are working at high pressure on further measures to keep the effects on our production as low as possible," VW said.

Porsche, the second-biggest contributor to VW group profit said last week it would temporarily limit the number of models it sells in Europe because of the implications of WLTP.

Wolfsburg-based VW had no comment on potential costs from the disruptions. Citing unnamed sources at VW, German magazine Der Spiegel on Friday reported that the risk for VW could run into billions as the bottlenecks mean a mid-level, six-digit number of cars could hit dealerships late or not at all.

On Wednesday, new Chief Executive Herbert Diess told a staff gathering at the main Wolfsburg plant that production there will be halted on certain days in August and September as VW will only build models that fulfil the new standards.