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Volkswagen has almost trebled its financial provision to cover the cost of its emissions-testing scandal, with a €16.9 billion hit that has pushed the carmaker to its first annual loss since 1993.

The German group, which admitted in September that it had fitted 11 million cars with software that enabled them to cheat fuel emissions tests, initially set aside €6.7 billion to cover the cost of recalls, repairs and compensation.

The scandal of carmakers falsifying fuel efficiency tests spread to Japan yesterday, when Mitsubishi Motors said that it had fixed results for 625,000 cars sold in Japan.

In an echo of the crisis enveloping Volkswagen, which admitted widespread cheating in emissions tests last September, Tetsuro Aikawa, Mitsubishi’s president, said that “the wrongdoing was intentional”.

Meantime Volkswagen is believed to have reached a deal with American authorities to settle the case over its cheating of diesel emissions tests that would involve it paying each affected customer $5,000.

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