Volkswagen Scandal Update: Recall of vehicles to start in January 2016

Volkswagen has been on a roller coaster ride ever since the news about its emission scandal broke - Chief Executive Martin Winterkorn resigned; reports came that no less than 25 lawsuits involving claimants from all 50 states in the U.S. have been filed against the company and its shares plunged as much as 40 percent after it admitted to U.S. regulators that it programmed its car to detect when they were being tested and alter the running of their diesel engines to conceal their true emissions.

In a recent interview with a German newspaper, Volkswagen Chief Executive Matthias Mueller said that the company would launch a recall for cars affected by its diesel emissions crisis in January and complete the fix by the end of next year, Reuters reported.

The statement comes after the company received a letter, towards the end of last month, from Germany’s Federal Motor Transport Authority, signed by transport minister Alexander Dobrindt, demanding it to present a binding plan and schedule to fix the 11 million “cheat code” diesel cars by October 7.

"If all goes according to plan, we can start the recall in January. All the cars should be fixed by the end of 2016," Mueller told the Frankfurter Allgemeine Zeitung (FAZ).

Mueller told the FAZ that he believed only a handful employees were involved in the diesel emissions rigging that has hammered Volkswagen’s stock and sabotaged its reputation, refuting the notion that his predecessor Martin Winterkorn must have known about it.

He said that the company would have to become smaller and less centralized, adding that every model and brand would be analysed for its contribution to the company and singling out Bugatti. He said an "evolution" rather than a "revolution" was needed to get VW back on track, predicting that the company could "shine again" in two to three years.

"This crisis gives us an opportunity to overhaul Volkswagen's structures," Mueller said. "We want to make the company slimmer, more decentralized and give the brands more responsibility.”

Mueller rejected the suggestion that VW had informed financial markets too late about the diesel problems despite having told officials at the U.S. Environmental Protection Agency (EPA) weeks before it went public.

"Based on our understanding of the law, we informed in time," he said.