Volkswagen crashed to a deep loss in the third quarter as the group's diesel emissions scandal wiped out earnings.
The automaker reported a net loss of 1.7 billion euros ($1.9 billion) for the quarter, down from a profit of nearly 3 billion euros a year ago.
That was after taking a charge of 6.7 billion euros for vehicle recalls and other costs associated with Volkswagen's (VLKAY) cheating of emissions tests in the U.S. and other markets.
But that provision will have to rise as the German company is presented with the bill for penalties, fines and customer compensation.
"We know this amount will grow," Volkswagen CFO Frank Witter said on a conference call. He could not say when the additional charges would be taken.
Analysts estimate that the final cost to the company could run to tens of billions of euros.
Shares in the company gained 1% to trade around 123.20 euros. They plunged as much as 38% in the weeks after the scandal broke in late September, but have since bounced back -- helped by evidence that the impact on sales has been limited, and a broad rally across German markets.
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Vehicle sales fell in the third quarter, down 3.7% to 2.35 million, which the group attributed to tough market conditions in countries such as Brazil, Russia and China.
But group revenue was 5% higher at 51.5 billion euros in the quarter, and executives said they were seeing no significant impact on orders or prices, or demand for diesels, as a result of the scandal.
"There's been a slight impact but overall on a group level we are fine with order intake and the diesel [to gasoline vehicle sales] ratio," said sales chief Axel Kalthoff.
Volkswagen said the charges related to the diesel scandal -- which could affect as many as 11 million vehicles worldwide -- would mean a sharp fall in 2015 operating profit across the group.
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"The diesel issue will clearly be the dominant factor in determining our financial performance this year," CFO Witter said. He said the group was currently not planning asset sales to bolster its reserves to weather the storm. It had a healthy 27.8 billion euros in cash at the end of September.
The group, which also owns the Audi and Porsche brands, has admitted that some of its diesel vehicles had software that could make their emissions look relatively clean during testing. But in real-world driving conditions the vehicles would spew up to 40 times the allowed level of nitrogen oxide.
The scandal has prompted a strategic rethink at Volkswagen, which briefly surpassed Toyota as the world's biggest carmaker earlier this year.
"It's not about selling 100,000 cars more or less than a big competitor. It is rather about qualitative growth," CEO Matthias Mueller said.
