Volkswagen in US recall setback

Volkswagen has suffered a setback in its efforts to emerge from the 10-month-old emissions-cheating scandal as California regulators rejected a recall proposal for 85,000 diesel-powered vehicles, raising the prospect that the German carmaker will have to buy them back.

The manufacturer’s plan for fixing Volkswagen, Audi and Porsche models equipped with 3.0-litre engines rigged to cheat on emissions tests was inadequate, the California Air Resources Board has said.

The regulator, along with the US Environmental Protection Agency, will continue talks with Volkswagen in hopes of finding a fix, the board said in letters on Wednesday to Volkswagen executives and attorneys.