Volvo shares slump on truck emissions fault
Shares in Swedish auto giant Volvo slumped Tuesday after the firm said it had discovered a fault in truck emission controls.
Shares fell back more than six percent in early morning trading to 133.4 kronor on a Stockholm market which was up 0.3 percent overall.
"Volvo Group has detected that an emissions control component used in certain markets is degrading more quickly than expected, which could cause the engines to exceed emissions limits for nitrogen oxides," the group said in a statement, adding the cost of fixing the issue could be substantial.
Volvo stressed all products equipped with the component meet emissions limits at delivery, citing a degradation "due to a materials issue that occurs over time.
"A full analysis of the issue is not completed and it is not possible to assess the financial impact at this stage; however, the cost could be material," the company said.
Emissions limits are strictly fixed in Sweden, and Volvo said it was informing "the appropriate authorities in various markets" on how to proceed.
"The degradation of the component does not pose a product safety issue, nor does it negatively affect vehicle or engine performance in areas other than emissions control," Volvo added.
It said most affected engines had been sold in North America and Europe.