VW to take $18 billion hit

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Wolfsburg, Germany (AP) – Volkswagen capped two grim days for the country’s auto industry by revealing its diesel emissions cheating cost it 16.2 billion euros ($18.2 billion) for 2015 alone – and that’s likely only a part of the total bill.

The revelation last September from U.S. environmental authorities that the company had been cheating on emissions tests also raised questions over the practices of others.

On Friday, German government officials said five German brands, including Volkswagen, would conduct a voluntary recall over emissions issues, a day after Mercedes-Benz owner Daimler said it was conducting an internal investigation into its emissions certifications at the request of U.S. authorities. The Volkswagen announcement follows agreement in a U.S. federal court in San Francisco on the outlines of a deal with U.S. environmental authorities.

Under the terms of the proposed deal, Volkswagen would offer to buy back almost 500,000 cars sold in the U.S. equipped with software that disabled emissions controls when the car was not being tested. Some 11 million cars worldwide are affected.

Analysts at Warburg Research think direct cost of fines, recalls and settlements worldwide will end up reaching 28.6 billion euros for fines – and that’s excluding any impact on sales and market share.