Anti-Pollution Rules May Hit Profits, Car Sales, Says Volkswagen CEO

Volkswagen Group's Chief Executive Herbert Diess warned that new anti-pollution tests pose a risk to the carmaker's profit targets. VW has warned that production of up to 250,000 cars will be delayed as it struggles to adapt its vehicles to a new anti-pollution test, the Worldwide Harmonized Light Duty Vehicles Test Procedure (WLTP). In a press conference on Wednesday to discuss second-quarter results, Diess said the ongoing changeover to the WLTP test procedure poses "the biggest volume and earnings risk for Volkswagen."

Diess said a strategic alliance VW is pursuing with U.S. automaker Ford Motor Co (F.N) has "very promising potential."

The two automakers said in June they were in talks about jointly developing and building a range of commercial vehicles, including vans.

VW's CEO said the company expects an alliance with Ford could bring the German automaker annual cost savings of up to 400 million euros ($466.88 million).

A spokesman for Ford said the company would provide details on the strategic details toward the end of 2018.

"We believe the work streams, including commercial vehicles, have significant potential but are not talking about values yet," the spokesman said.