EU investigating loans to company.

The German Federal Motor Transport Authority (KBA) has approved the proposed technical fix from Volkswagen (VW) for about 8.5 million diesel engines in Europe. The fixes will apply to 1.2-, 1.6- and 2.0-litre diesel engines in 28 national markets within the European Union (EU). The VW Group has issued a statement detailing the technical measures for the affected EA189 diesel engines. The 1.2-litre and 2.0-litre engines will receive a software update, which will take "just under half an hour" while the 1.6-litre engine will also a get a software update, and a "flow rectifier" will be fitted in front of the air mass sensor. Implementation of these measures will start in late January 2016. "After the measures have been implemented, the vehicles will fulfil the duly applicable emissions standards, with the aim of achieving this without any impairment of engine output, fuel consumption or performance," the automaker said. In a separate but related issue, the EU's anti-fraud office (OLAF) is now investigating loans received by the VW Group from the European Investment Bank to produce cleaner engines, Bloomberg reports. "The fact that OLAF is examining the matter does not mean that the persons or entities involved have committed an irregularity," the authority said in an emailed statement on Wednesday (16 December). "OLAF fully respects the presumption of innocence and the rights of defense of the persons and entities concerned by an investigation."
 

Significance: VW Group issued its statement highlighting that the KBA has ratified the automaker's plans to fix the affected diesel engines. The company now plans to issue letters to each and every owner with an affected vehicle and that the affected vehicles will be called in "several waves" with the 2.0-litre diesel engine vehicles to be fixed in the first quarter of 2016, while the 1.2-litre engine models will be fixed in the second quarter and the 1.6-litres in the third. A replacement mobility option will be provided free of charge for all customers where necessary, the automaker says in the statement. VW continues to stress that "the vehicles continue to be technically safe and ready to drive and can therefore be used on the road without any restrictions." Regarding the investigation by OLAF, the automaker has been reportedly not been informed directly of the probe. Meanwhile the KBA has said that it will re-test vehicles once the fix has been installed. Bloomberg quotes company spokesperson Eric Felber stating that VW is "astonished that the authority [OLAF] goes public with this information without informing those subject to the issue."

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