04/11/2015 World Business Report

Now for the latest financial news with

From diesel to petrol, the VW scandal spreads.

It finds "inconsistencies" concerning carbon

dioxide output that could require a multi-billion dollar fix.

And investors snap up Japan Post shares on its first day

of trade sending the stock price soaring, in the biggest market

Welcome to World Business Report, I'm Sally Bundock.

Also in the programme, we'll have the latest

on the potentially record fines for Takata over its exploding airbags.

But first - another day, another twist in the Volkswagen

The German car giant has discovered "inconsistencies" in 800,000

of its cars in Europe, which are in breach

And this time, both diesel and gasoline cars are

involved, though the company has yet to give a breakdown.

VW has said it's looking at a $2.2 billion bill to fix the problem in

That's largely because a carbon dioxide fix will be

more costly than simply doing a software update, which is the case

This has to do with the way fuel is consumed by the car,

meaning that vehicles are not as fuel-efficient as they claim to be.

Professor Christian Stadler Associate Professor of Strategic

And thank you for joining us. One analyst is quoted as saying, VW is

leaving us speechless. That is almost true. One of the advantages

of these cars is usually that the pollution level is lower, now the

story is that we have a problem including petrol engines on that

problem. It does leave you speechless. How bad could this be,

given they said it could be up to 800,000 cars. Could it escalate?

Yes, if you look at the beginning, it knew about some cars but then it

became much bigger. It is very possible we have the same situation

again. In terms of sorting out this problem, it is a bit more

complicated. Can you elaborate? We don't really know yet how they can

sort this problem out, we don't even know exactly what the problem is. We

have to wait to hear a bit more. For the new CEO, this puts renewed

pressure on him. Also yesterday's announcement, the sales of some

Porsche cars are being criticised by some US regulators. New Porsche

vehicles could be on hold in the US, that is another headache? It is.

Yesterday's News is a big problem. The new CEO was partially chosen

because he seemed to be untainted by the scandal, if Porsche cars are

involved as well it puts a big question over that. We have to

remind our view is that he was in charge of the Porsche element of the

business prior to becoming the CEO of Volkswagon as a whole. What is

the outlook for VW in terms of sorting out and moving on from this

problem? It could be some time away given the spreads to petrol cars. It

was always going to take some time. It is potentially substantially more

expensive than it already was. Who knows when we will see the end of

it? Thank you very much for your time. In terms of the cost of the

company, they are estimating about 2 million -- 2 billion euros, that is

already on top of the 6.6 billion euros for the previous scandal with

cars. Now Asian markets have been

exceptionally volatile over the last few months,

but some companies are still taking Shares in Japan Post soared

as it started start trading in what is likely to be the world's biggest

initial public offering of the year. The government is selling just over

a tenth of its stake in Japan Post and along with its banking

and insurance units, Mariko Oi is in our Asia

Business Hub in Singapore, so how Is this seen as a success? If it was

a gamble in this volatile market, it did pay off at least on the first

day. Shas of the parent company, Japan Post Holdings, open 16 1/2%

higher. Their shares were rising as much as 40%. A lot of excitement

when the broader indicate market was up by just 2%. It is the biggest

share a cell in the world this year. I put together some background

information about this sale. -- Nikkei. In Japan, postal workers

have always done more than just deliver letters. They have long been

a mobile banking service, collecting savings and selling insurance. It

has been a popular place for Japanese people to put their money.

The Post Office holds savings of more than $1.5 trillion, making it

in fact the world's against rank. -- biggest bank. Most of that has been

invested in government bonds or used to fund public spending. Ten years

ago the decision to privatise Japan Post was made by the former prime

minister. He argued that it is enormous assets would be spent more

beneficially in private hands. It is controversial, but finally going

ahead. 80% is being offered to Japanese individuals, while the

other 20% are sold to institutional investors -- it. The fact of the

matter is that it has huge potential, domestically they are the

Oliver of the industry. There is a lot of potential to be had. There

are lots of questions as to whether they can really utilise their power

to fully use their potential. Secondly, their international

business. We don't know if they can really expand overseas by using

their strength -- Gulliver. In this first round, the government is only

selling down one tenth of its holdings. The plan is to gradually

sell more of its shares. While it is a big change for Japan Post, there

is one of them is one service that won't be affected - and that is the

male and parcel deliveries. Its branches will continue operating as

business as usual. Before you go, tell us about -- T Takata? We had

from the company's president he held a press conference, I was just

watching his talk earlier. He did not say a lot, but he did say that

what we can expect regarding the fine imposed by the US regulators

worked $70 million, could be increased to up to $200 million. He

said the company is taking it sincerely and doing their best to

solve the problem. The big issue is, no one seems to know exactly what is

causing this faulty airbag to explode. So far, several deaths have

been caused and tens of millions of cars have been recalled. Primarily

in the US, but also around the world. The company's chairman said

that the firm will phase out the chemical which is thought to have

ruptured or caused them to rupture, that was an order from the US

regulators on top of that fine. Thank you so much.

In other news: Shares in electric car-maker Tesla jumped

7.5 percent in extended trading after it reported

The company delivered 11,603 cars in the second quarter

Costs related to that rollout contributed to a net loss for

the company of nearly $230 million, its biggest loss in 10 quarters.

Taking a quick look at the Asian markets. Any pessimism about China

seems to be taking a back seat. That is all for now, CUC and when we look

at some other business stories intraday's papers. -- in today's.

A proposed law to govern how the police and intelligence agencies

can access communications data is due for publication.

It's expected to include new powers allowing them to obtain details