(Bloomberg) -- Volkswagen AG will embark on one of the biggestrecalls in European automotive history, affecting 8.5 milliondiesel vehicles, after German authorities threw out the carmaker’sproposal for voluntary repairs.

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The Federal Motor Transport Authority, or KBA, demanded a recallof 2.4 million cars in Germany after reviewing proposalsVolkswagen filed last week to fix vehicles fitted with softwaredesigned to cheat on pollution tests, German Transport MinisterAlexander Dobrindt said Thursday in Berlin. The mandatoryrecall is the basis for callbacks throughout Europe, where dieselaccounts for more than half the market.

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Germany’s rare public snub of its biggest carmaker came afterVolkswagen circumvented diesel emissions regulations starting in2008. The country’s demands will speed a process that Volkswagensaid will last beyond 2016, and give authorities more control.

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“It’s an unusual measure to be ordering a mandatory recall,”said Arndt Ellinghorst, a London-based analyst with Evercore ISI.“It shows to me that the KBA is losing patience with VW’s slowresponse on what to do to fix the engines so far. Customers havebeen left unsettled.”

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Biggest recall

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The 8.5 million affected cars represent slightly less thanone-third of Volkswagen’s auto deliveries in the region from 2009through August, based on sales figures the company published forthe five divisions involved. The recall is also Germany’s biggestsince its current rules took effect in 1997, more than the record1.9 million cars the entire auto industry brought back in underrepair programs last year, according to data from the Center forAutomotive Management in Bergisch Gladbach, Germany.

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The mandatory recall will be more expensive for Volkswagenbecause the company will need to work on the cars more quickly,Evercore’s Ellinghorst said. The manufacturer has yet to specifyexactly how it will fix the cars, though it has said some willrequire only a software update while others will need new orrebuilt engine parts.

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“The KBA’s decision opens up the possibility of a common andcoordinated response in all European Union states,” VolkswagenChief Executive Officer Matthias Mueller wrote Dobrindt onThursday in a letter obtained by Bloomberg. “Such a unifiedprocedure would be in the European spirit as well as in theinterests of customers.”

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Mid-November

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Volkswagen must share technical details of its fix withauthorities by mid-November, and the recall will begin in January.The KBA will test vehicles to ensure the repairs were successful,Dobrindt said. New parts necessary to fix some vehicles willprobably be ready by next September, he said. Throughout Europe,Dobrindt has estimated that Volkswagen will probably need toexchange or rebuild parts for about 3.6 million engines.

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For the sake of customers and the image of the automobile, “wewill clear up what happened at Volkswagen,” Enak Ferlemann, statesecretary in Germany’s Transport Ministry, said in a speech in thelower house of parliament. “Germany will stay the No. 1 autocountry.”

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Regulators in the U.S. haven’t announced a recall yet. The U.S.Environmental Protection Agency, which has jurisdiction overcompliance with emission standards, said Volkswagen will have topropose a remedy. The agency then will need to be convinced it willwork before it’s made part of a recall. Officials have declined tospecify a timetable for the next steps.

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Leipzig meeting

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As Volkswagen grapples internally with the crisis, about 400 ofits top executives met in Leipzig on Thursday. Another of thecompany’s top engineers, Falko Rudolph, chief of a parts factorynear Kassel, was suspended as part of the investigation, a personfamiliar with the situation said, asking not to be named becausethe suspension is private. Rudolph couldn’t be reached forcomment.

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The carmaker admitted in September to designing software so that482,000 of its diesel cars in the U.S. would turn on full pollutioncontrols only when undergoing laboratory emissions testing, not onthe road. Since then the deception has been shown to be farbroader, affecting about 11 million cars worldwide. The softwarewas also active in diesels VW sold with the same EA189 engine inGermany, Dobrindt said Thursday.

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“The KBA is under pressure to show to the public they’re on topof this and that they’re in the driver’s seat,” said StefanBratzel, head of auto research at the University of AppliedSciences. “Recalls to fix key safety issues that go to the core ofa vehicle’s operation almost always occur voluntarily, with the KBAmonitoring. So making this fix -- while the cars are running safely-- a mandatory one shows the political pressure.”

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The shares fell 3.6 percent to 102.80 euros in Frankfurt. Thediesel crisis has wiped 21.5 billion euros ($24.5 billion) offVolkswagen’s market value.

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VW faces a “large need for change,” Mueller told his topexecutives in Leipzig, according to a transcript of his speech. “Idon’t think much of revolution. And the Volkswagen group doesn’tneed one. What we need is courage to act consequently, the will tochange.”

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--With assistance from Tommaso Ebhardt and Sergio Di Pasquale inMilan, Alexander Weber in Vienna, Alice Baghdjian in Zurich, TomLavell in Frankfurt and Jeff Plungis in Washington.

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Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

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