Diesel Gate: Moody's Downgrades VW Credit Rating

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The investment services agency Moody's hit the Volkswagen group with a credit downgrade due to the ongoing diesel-gate emissions scandal.

The downgrade from ‘A2' to ‘A3' comes after the US Environmental Protection Agency claimed that VW's 3-litre V6 engine may also use the emission rigging software. Volkswagen uses the engine in its high end cars including the Porsche Cayenne.

The new claims mean that the German automaker will find itself locked in drawn-out litigations which could lead to costly fines and restriction being placed on its activities in the future.

Moody's stated that the downgrade is due to its growing concerns about VW's internal control and governance issues. Moody's also stated that the new claims pose fresh challenges to the company's competitive position and financial flexibility.

Volkswagen's shares have dropped by a third since the emission scandal was uncovered back in September.

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