:00:00. > :00:00.Now for the latest financial news with
:00:00. > :00:22.From diesel to petrol, the VW scandal spreads.
:00:23. > :00:23.It finds "inconsistencies" concerning carbon
:00:24. > :00:37.dioxide output that could require a multi-billion dollar fix.
:00:38. > :00:40.And investors snap up Japan Post shares on its first day
:00:41. > :00:43.of trade sending the stock price soaring, in the biggest market
:00:44. > :00:46.Welcome to World Business Report, I'm Sally Bundock.
:00:47. > :00:48.Also in the programme, we'll have the latest
:00:49. > :00:52.on the potentially record fines for Takata over its exploding airbags.
:00:53. > :00:54.But first - another day, another twist in the Volkswagen
:00:55. > :01:02.The German car giant has discovered "inconsistencies" in 800,000
:01:03. > :01:05.of its cars in Europe, which are in breach
:01:06. > :01:11.And this time, both diesel and gasoline cars are
:01:12. > :01:16.involved, though the company has yet to give a breakdown.
:01:17. > :01:20.VW has said it's looking at a $2.2 billion bill to fix the problem in
:01:21. > :01:29.That's largely because a carbon dioxide fix will be
:01:30. > :01:32.more costly than simply doing a software update, which is the case
:01:33. > :01:46.This has to do with the way fuel is consumed by the car,
:01:47. > :01:49.meaning that vehicles are not as fuel-efficient as they claim to be.
:01:50. > :01:51.Professor Christian Stadler Associate Professor of Strategic
:01:52. > :02:04.And thank you for joining us. One analyst is quoted as saying, VW is
:02:05. > :02:11.leaving us speechless. That is almost true. One of the advantages
:02:12. > :02:16.of these cars is usually that the pollution level is lower, now the
:02:17. > :02:23.story is that we have a problem including petrol engines on that
:02:24. > :02:27.problem. It does leave you speechless. How bad could this be,
:02:28. > :02:36.given they said it could be up to 800,000 cars. Could it escalate?
:02:37. > :02:40.Yes, if you look at the beginning, it knew about some cars but then it
:02:41. > :02:44.became much bigger. It is very possible we have the same situation
:02:45. > :02:48.again. In terms of sorting out this problem, it is a bit more
:02:49. > :02:52.complicated. Can you elaborate? We don't really know yet how they can
:02:53. > :02:57.sort this problem out, we don't even know exactly what the problem is. We
:02:58. > :03:07.have to wait to hear a bit more. For the new CEO, this puts renewed
:03:08. > :03:12.pressure on him. Also yesterday's announcement, the sales of some
:03:13. > :03:18.Porsche cars are being criticised by some US regulators. New Porsche
:03:19. > :03:23.vehicles could be on hold in the US, that is another headache? It is.
:03:24. > :03:28.Yesterday's News is a big problem. The new CEO was partially chosen
:03:29. > :03:33.because he seemed to be untainted by the scandal, if Porsche cars are
:03:34. > :03:38.involved as well it puts a big question over that. We have to
:03:39. > :03:47.remind our view is that he was in charge of the Porsche element of the
:03:48. > :03:52.business prior to becoming the CEO of Volkswagon as a whole. What is
:03:53. > :03:55.the outlook for VW in terms of sorting out and moving on from this
:03:56. > :04:04.problem? It could be some time away given the spreads to petrol cars. It
:04:05. > :04:08.was always going to take some time. It is potentially substantially more
:04:09. > :04:12.expensive than it already was. Who knows when we will see the end of
:04:13. > :04:21.it? Thank you very much for your time. In terms of the cost of the
:04:22. > :04:33.company, they are estimating about 2 million -- 2 billion euros, that is
:04:34. > :04:35.already on top of the 6.6 billion euros for the previous scandal with
:04:36. > :04:37.cars. Now Asian markets have been
:04:38. > :04:39.exceptionally volatile over the last few months,
:04:40. > :04:42.but some companies are still taking Shares in Japan Post soared
:04:43. > :04:46.as it started start trading in what is likely to be the world's biggest
:04:47. > :04:53.initial public offering of the year. The government is selling just over
:04:54. > :04:57.a tenth of its stake in Japan Post and along with its banking
:04:58. > :04:59.and insurance units, Mariko Oi is in our Asia
:05:00. > :05:17.Business Hub in Singapore, so how Is this seen as a success? If it was
:05:18. > :05:25.a gamble in this volatile market, it did pay off at least on the first
:05:26. > :05:32.day. Shas of the parent company, Japan Post Holdings, open 16 1/2%
:05:33. > :05:39.higher. Their shares were rising as much as 40%. A lot of excitement
:05:40. > :05:48.when the broader indicate market was up by just 2%. It is the biggest
:05:49. > :05:54.share a cell in the world this year. I put together some background
:05:55. > :06:00.information about this sale. -- Nikkei. In Japan, postal workers
:06:01. > :06:06.have always done more than just deliver letters. They have long been
:06:07. > :06:14.a mobile banking service, collecting savings and selling insurance. It
:06:15. > :06:21.has been a popular place for Japanese people to put their money.
:06:22. > :06:28.The Post Office holds savings of more than $1.5 trillion, making it
:06:29. > :06:33.in fact the world's against rank. -- biggest bank. Most of that has been
:06:34. > :06:37.invested in government bonds or used to fund public spending. Ten years
:06:38. > :06:45.ago the decision to privatise Japan Post was made by the former prime
:06:46. > :06:51.minister. He argued that it is enormous assets would be spent more
:06:52. > :06:55.beneficially in private hands. It is controversial, but finally going
:06:56. > :07:04.ahead. 80% is being offered to Japanese individuals, while the
:07:05. > :07:13.other 20% are sold to institutional investors -- it. The fact of the
:07:14. > :07:19.matter is that it has huge potential, domestically they are the
:07:20. > :07:24.Oliver of the industry. There is a lot of potential to be had. There
:07:25. > :07:29.are lots of questions as to whether they can really utilise their power
:07:30. > :07:31.to fully use their potential. Secondly, their international
:07:32. > :07:38.business. We don't know if they can really expand overseas by using
:07:39. > :07:42.their strength -- Gulliver. In this first round, the government is only
:07:43. > :07:47.selling down one tenth of its holdings. The plan is to gradually
:07:48. > :07:51.sell more of its shares. While it is a big change for Japan Post, there
:07:52. > :07:57.is one of them is one service that won't be affected - and that is the
:07:58. > :08:03.male and parcel deliveries. Its branches will continue operating as
:08:04. > :08:18.business as usual. Before you go, tell us about -- T Takata? We had
:08:19. > :08:23.from the company's president he held a press conference, I was just
:08:24. > :08:27.watching his talk earlier. He did not say a lot, but he did say that
:08:28. > :08:33.what we can expect regarding the fine imposed by the US regulators
:08:34. > :08:37.worked $70 million, could be increased to up to $200 million. He
:08:38. > :08:42.said the company is taking it sincerely and doing their best to
:08:43. > :08:45.solve the problem. The big issue is, no one seems to know exactly what is
:08:46. > :08:56.causing this faulty airbag to explode. So far, several deaths have
:08:57. > :08:59.been caused and tens of millions of cars have been recalled. Primarily
:09:00. > :09:04.in the US, but also around the world. The company's chairman said
:09:05. > :09:09.that the firm will phase out the chemical which is thought to have
:09:10. > :09:13.ruptured or caused them to rupture, that was an order from the US
:09:14. > :09:17.regulators on top of that fine. Thank you so much.
:09:18. > :09:19.In other news: Shares in electric car-maker Tesla jumped
:09:20. > :09:21.7.5 percent in extended trading after it reported
:09:22. > :09:24.The company delivered 11,603 cars in the second quarter
:09:25. > :09:29.Costs related to that rollout contributed to a net loss for
:09:30. > :09:48.the company of nearly $230 million, its biggest loss in 10 quarters.
:09:49. > :10:02.Taking a quick look at the Asian markets. Any pessimism about China
:10:03. > :10:07.seems to be taking a back seat. That is all for now, CUC and when we look
:10:08. > :10:21.at some other business stories intraday's papers. -- in today's.
:10:22. > :10:24.A proposed law to govern how the police and intelligence agencies
:10:25. > :10:25.can access communications data is due for publication.
:10:26. > :10:29.It's expected to include new powers allowing them to obtain details