VW Says 3 million 'Cheat' Diesels in Europe Need Hardware Fix

Cars featuring a 1.6-liter diesel engine require technical tweaks, while software updates are sufficient to make the other affected engines compliant, a VW spokesman said.

VW said last week it will recall about 8.5 million cars across Europe through 2016 and acknowledged efforts to fix all cars might drag on until 2017.

Worldwide some 11 million cars with diesel engines are affected by the wide-ranging emissions rigging that was uncovered by U.S. regulators.

Moody’s Investors Service said Wednesday that uncertainties about the potential impact on VW’s reputation, earnings and cash flows could weigh on the manufacturer’s credit profile into 2017.

New CEO Matthias Mueller said last week protecting the company’s credit rating is a top priority. VW can recover from the scandal in two-to-three years if the right decisions are made now to make VW more efficient, agile and cost competitive, he said.