German carmaker Volkswagen has announced that it will make a provision of 6.5 billion euros ($7.3 billion) in the third quarter following the revelations last week that it had misled authorities over the emissions of its diesel cars.
The company added Tuesday that this provision was subject to revaluation and that it was working with the relevant authorities to clarify the irregularities in the software that recorded emissions in the carmaker's diesel engines.
Up to 11 million vehicles could be affected in the scandal, the German auto giant added.
Frankfurt-listed shares in Volkswagen closed down nearly 20 percent on Tuesday on the news of the profit warning. This followed declines of 18 percent on MOnday.
The scandal surrounding Volkswagen's emissions data has raised fears that damage may not be limited to the automaker. There could be another casualty: Germany's hard-won reputation for reliability, efficiency and trustworthiness is at stake.
Handelsblatt, the German financial newspaper, dubbed the scandal "eine Katastrophe für die gesamte deutsche Autoindustrie" ("a catastrophe for the entire German car industry") in an editorial Monday, and with good cause.
Vorsprung durch Technik (advancing through technology) may have originally been an Audi slogan, but it came to epitomize much of what was believed about German manufacturing capability and reliability across its car industry, the cornerstone of Germany's post-war economic miracle. Close to a fifth of German exports are in some way linked to the industry.