VW says only small group to blame for emissions scandal

By Andreas Cremer

WOLFSBURG, Germany (Reuters) - Volkswagen <VOWG_p.DE> said on Thursday only a small group of employees was responsible for cheating U.S. diesel emissions tests and there was no indication board members were involved in the biggest business crisis in the carmaker's history.

Chairman Hans Dieter Poetsch said investigations into the affair were going well, but the scandal was the result of a "chain of errors" and it would still take months to say which individuals were to blame.

Europe's biggest motor manufacturer said it had agreed steps to improve oversight of engine-software development to avoid any future emissions test manipulations.

It also hoped to reach agreement with U.S. environmental authorities in the next few days or weeks so the company can start to recall affected cars there. Cooperation with those authorities was described as "excellent".

VW admitted in September it had cheated U.S. emissions tests and installed software capable of deceiving regulators on up to 11 million diesel vehicles worldwide, news that wiped billions of euros off its market value and forced out its long-time CEO.

Some U.S. lawmakers were heavily critical of the company in the following days when it blamed a handful of rogue engineers, even though investigations were only getting underway.

But VW's reputation was given a boost on Wednesday when it said another scandal involving the understatement of carbon dioxide emissions was not as bad as feared.

"One could argue they should have revealed what they know a lot sooner than two-and-a-half months after the crisis started, but they are raising their game now," said Stefan Bratzel, head of the Center of Automotive Management think-tank.

"It will be important to maintain that level of exchange with the public in coming months to prove they're serious about transparency."

At 1625 GMT, VW shares were up 2 percent ay 134.4 euros, still down on their pre-scandal level of about 162 euros, but up from October's low of around 86 euros.

Despite the scandal, orders so far this year were up by 3.5 percent and Chief Executive Matthias Mueller said he was confident drivers would get over their reluctance to buy the group's vehicles in the coming weeks.

VW also said it was planning a new corporate structure that would be in place across the group by early 2017. The company was not considering the sale of any units to simplify its structure or raise money, and was happy with having 12 brands.

But executives were still unable to estimate the scandal's legal costs, for which they had so far made no provisions.

Analysts have said VW could have to pay out tens of billions of euros to cover regulatory fines, lawsuits and vehicle refits.