Fitch Ratings Inc. has cut Volkswagen AG’s credit rating by two points on account of the increasing emissions scandal that the company is involved in on Tuesday, reports AFP.
“The downgrade to BBB+ reflects the corporate governance, management and organisational issues highlighted by the ongoing emission test crisis. We believe that the emergence of a fraud of this magnitude going either unnoticed or uncorrected by top management for so long is not consistent with a rating in the A category,” said Fitch in a statement.
However, the ratings agency feel that the changes in the management of the company since the emissions scandal have been inadequate. The changes at the management do not reflect a primary resolve by the company to fix its group culture.
Moreover, Fitch Ratings also said the emissions scandal might not be just restricted to nitrogen oxide but also carbon dioxide emissions. The ratings agency said further investigations should be carried out to know the exact damage caused by Volkswagen’s diesel emissions scandal.
The scandal came out in the open on September 18, when the US EPA revealed the German automakers have fitted ‘cheat devices’ in various diesel cars to go past the emissions standard of the country. Volkswagen AG, then admitted to have fitted around 11 million diesel cars in the US and in several countries with the ‘defeat device’.