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Image copyright Getty Images 
  
 Volkswagen has reported its first quarterly loss for at least 15 years after taking a big charge to cover the costs of its emissions scandal. 
  
 VW said it had set aside €6.7bn ($7.4bn; £4.8bn) to cover the scandal, leaving it with a €2.52bn pre-tax loss for the third quarter of the year. 
  
 In September, VW admitted installing software to cheat emissions tests in 11 million of its diesel cars worldwide. 
  
 Despite the scandal the company still expects sales to grow this year. 
  
 However, VW said it expected profits for the full year to be "down significantly". 
  
 'Manageable' burden 
  
 In the three months to the end of September, vehicle sales fell 3.7% and production fell 11.6% compared with the same period last year. However, VW said that it was still forecasting a rise of up to 4% in sales revenue for the whole of the year. 
  
 The €6.7bn charge is likely to be the first of a raft of costs that the company has to face. Chief financial officer Frank Witter said: "No penalties or fines [or] compensation to customers have been included [in the €6.7bn charge]. 
  
 "The financial burden is enormous but manageable... but we will emerge stronger and leaner than ever before." 
  
 Analysis: Business Correspondent Theo Leggett 
  
 For VW, the financial pain is only just beginning. The €6.7bn it has already set aside was enough to turn a healthy third quarter profit into a sizeable loss. But the final bill is likely to be much, much higher. 
  
 Firstly, VW has to cover the costs of recalling and modifying 11 million diesel-powered cars. Those costs should be relatively easy to quantify. 
  
 But on top of that, it is facing civil penalties, criminal investigations and lawsuits from both customers and investors. The company itself admits it simply doesn't know how much it will eventually have to pay. Outside estimates range from €20bn to €60bn. 
  
 So can VW survive the crisis? 
  
 The simple answer is yes, it probably can. If you strip away the costs related to the crisis itself, what's left is a strong, profitable business (which happens to be part owned by the regional government of Lower Saxony). 
  
 Yes, its brand has been damaged, but the company says sales have not been badly affected so far. There have been repeated apologies from senior managers, a major corporate restructuring and a new emphasis on rebuilding the trust of consumers. 
  
 That is a similar strategy to the one pursued by Toyota five years ago, after it admitted lying to regulators and consumers in the US about potentially lethal problems with accelerator pedals. Car buyers in North America did turn away in droves for a while - but they soon returned. 
  
 In fact, Toyota is currently the World's largest carmaker by sales, a title it won at the expense of...Volkswagen. 
  
 VW said that although sales were down over the past three months, the scandal had had a limited effect. Axel Kalthoff, director of group sales, said: "We do not see that the diesel issue is impacting our sales and order intakes for diesel. 
  
 "There might be one or another country or one or another brand, especially in western Europe, that might be affected for the time being on the diesel issue, but at a group level we are fine on order intake." 
  
 VW said the legal costs of the scandal "cannot be estimated at the current time". But it added that "considerable financial charges may be incurred as the legal risks crystallize". 
  
 In its quarterly report, it outlined the types of litigation it expects to face: 
  
 Criminal and civil charges from national regulatory authorities. 
  
 Class action or individual civil lawsuits from customers. 
  
 Class action or individual civil lawsuits from investors. 
  
 Image copyright Getty Images 
  
 At the scene: Emily Young, Wolfsburg 
  
 There's an air of defiance about VW's workers in Wolfsburg. 
  
 They feel that the reaction to the scandal has been overdone. The environmental damage is nothing compared to BP's Deepwater Horizon oil spill and the cars are still greener than the American gas guzzlers, they say. 
  
 Detractors would of course point to the fact that the problem lies more with the behaviour of the company than the impact on the environment. 
  
 But if VW is going to successfully navigate this crisis - it will need the backing of its workers. For now, it appears to have that. 
  
 VW crisis: The view from Wolfsburg 
  
 Broken trust 
  
 Commenting on the latest results, Matthias Mueller, VW's chief executive and chairman of the board of management, said: "The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear. 
  
 "We will do everything in our power to win back the trust we have lost." 
  
 Meanwhile the group has started retrenching and announced earlier this month it would reduce its research and development budget. In the last three months it has reduced R&D by more than €1bn. 
  
 VW's shares have fallen some 25% since September when the US Environmental Protection Agency (EPA) found that many VW diesel cars being sold in America had devices that could detect when they were being tested, and artificially improve the results. 
  
 The group's chief executive, Martin Winterkorn, said his company had "broken the trust of our customers and the public" and resigned. He was replaced by Mr Mueller, the former boss of Porsche. 
  
 Volkswagen shares ended up 2% on Wednesday. ||||| Matthias Müller vows to win back public trust as scandal-hit carmaker plunges €3.5bn into the red – its first quarterly loss in 15 years 
  
 Volkswagen boss Matthias Müller has vowed to be “ruthless in punishing those involved” in the emissions-rigging scandal, which pushed the German carmaker €3.5bn into the red, its first quarterly loss in 15 years. 
  
 Speaking before a trip to China with the German chancellor, Angela Merkel, Müller apologised to shareholders and customers for the scandal. 
  
 “We are leaving no stone unturned to find out what exactly happened and to make sure nothing like this ever happens again,” he told analysts and investors. Volkswagen has hired professional services firm Deloitte to help with the investigation. 
  
 At the Tokyo motor show, Herbert Diess, who runs the Volkswagen brand, and Sven Stein, the head of VW’s Japanese division, also apologised for the scandal. Stein stood on stage and bowed for several seconds in a Japanese style apology. 
  
 Setting out a five-point plan, Müller said that while Volkswagen’s drive for perfection would continue, the company’s mindset and culture would change. He promised a major reorganisation including decentralisation and faster decision making. 
  
 A new strategy, named 2025, will be announced next summer. The carmaker wants to concentrate on quality not quantity, he said. It also plans to cut back its portfolio of more than 300 models and offer more electric cars. 
  
 Volkswagen posts €3.48bn operating loss as emissions scandal bites - business live Read more 
  
 Müller’s remarks came as Volkswagen posted an operating loss of €3.48bn in the third quarter against a profit of €3.2bn a year earlier. The loss was broadly in line with analysts’ forecasts. The company expects 2015 operating profits to be down significantly on last year’s €12.7bn as a result of the emissions fallout. 
  
 The company took a €6.7bn charge to cover the cost of recalling 11m vehicles which contain software to cheat emission tests, up from the €6.5bn it had previously set aside. Müller was unable quantify potential penalties and litigation costs. 
  
 Analysts estimate that Volkswagen’s final bill could climb to €78bn as it faces regulatory fines and class-action lawsuits around the world. The company has increased cost cutting efforts and can cover part of the cost from its cash reserves. VW’s chief financial officer, Frank Witter, said the financial fallout was “enormous but manageable”. There are no plans to cut the dividend. 
  
 Volkswagen shares shrugged off the news and rose more than 4% during trading, making the firm the biggest riser on the German stock market. 
  
 Nearly six weeks after Volkswagen admitted it cheated emissions tests in the US, Müller pledged: “We will do everything in our power to win back the trust we have lost.” 
  
 But Bozena Michalowska Howells, from UK law firm Leigh Day, who is investigating compensation claims on behalf of 6,500 British drivers, was not convinced. She said: “Volkswagen customers still do not know what is going to happen to their vehicles. If Mr Müller wishes to restore trust he could start the process of setting up a compensation scheme.” 
  
 Moody’s credit rating agency said it was reviewing the results as part of its assessment of Volkswagen’s credit quality, adding that the emissions crisis had “become an important consideration for the Volkswagen rating”. Weaker prices for secondhand diesel cars pose additional risk. 
  
 Facebook Twitter Pinterest Sven Stein, head of VW’s Japanese division, apologises at the start of a presentation at the Tokyo motor show. Photograph: Yuya Shino/Reuters 
  
 Group sales rose by 8.5% to €160bn in the third quarter. Volkswagen warned that deliveries to customers would be flat this year – on a par with last year’s record €10.14m sales. However, sales chief Axel Kalthoff insisted that orders for diesel vehicles had not been affected by the scandal. 
  
 Volkswagen’s Porsche brand cut its full-year profit forecast by about €2bn as a result of the emissions scandal. It expects to post a 2015 profit after tax of €800m-1.8bn. 
  
 Sebastiaan Van Doorn, assistant professor of enterprise at Warwick Business School, said: “While VW has reported a loss, underlying sales numbers are robust. It is likely that VW, one of the largest employers in Germany, will survive this scandal … The losses associated with this scandal will be spread out over many years. 
  
 The Volkswagen emissions scandal explained Read more 
  
 “The greater worry is that VW does not seem eager to change much about its corporate policy, or change its hierarchical makeup and centralised decision-making strategies that break up the interface between the top management team and middle managers.” 
  
 On Monday, VW lost the coveted top spot for global car sales to Japanese rival Toyota, a few months after it achieved its longstanding ambition of becoming the world’s bestselling car manufacturer. VW sales fell in China, the company’s biggest export market, for the first time in a decade. |||||Summary:

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– Volkswagen's new chief executive, Herbert Diess, apologized at the Tokyo Motor Show Wednesday for the automaker's emissions-cheating scandal, promising to win back customer trust, and said it will delay the launch of a diesel vehicle in Japan. The head of VW's Japan division appeared at the VW booth before Diess and bowed for several seconds in a Japanese style of apology. Diess made no bow. "On behalf of my entire company, I'd like to apologize," said Diess, a recent hire from BMW, stressing that the priority is to fix the problem, uncover what happened, and make sure it never happens again. This comes as the company reported a net loss of $1.83 billion in the third quarter as earnings took a hit from $7.4 billion in set-asides for recalls and fines connected to the scandal. The Guardian reports it's the first time the company has posted a quarterly loss in at least 15 years. The company, which has admitted installing test-cheating software in 11 million vehicles, says full-year profits will probably be "down significantly," but sales revenue is still forecast to rise, reports the BBC. (Leonardo DiCaprio is producing a movie about the scandal.)