German auto giant Volkswagen on Wednesday booked its first quarterly loss in more than 15 years in the wake of the global pollution-cheating scandal which also forced it to lower its full-year forecasts.

VW said initial provisions related to its admission that it had fitted 11 million diesel vehicles worldwide with sophisticated software to skew emissions tests pushed it deeply into the red in the period from July to September.

But the group also warned of further "considerable financial charges" related to legal proceedings over the scam, over which it is the subject of criminal probes in a handful of countries.

Chief financial officer Frank Witter told a conference call with analysts that the scandal, which broke in September, had "significantly impacted business in third quarter."

It was "far too early to calculate the cost of any legal measures," Witter said. "The financial burden will be enormous, but manageable."

It faces a fine of up to $18 billion from the US Environmental Protection Agency alone.

Volkswagen, which has just been overtaken by Toyota as the world's biggest carmaker in terms of sales, said it ran up a net loss of 1.673 billion euros ($1.85 billion) in the three-month period, compared with a profit of 2.971 billion euros a year earlier.

That was still better than analysts had expected: according to Factset, consensus forecasts had put the anticipated net loss at 2.11 billion euros.

The losses were due to a charge of 6.7 billion euros VW took to cover the initial costs of the scandal, primarily a recall of all affected vehicles beginning in January.

Excluding that provision, operating profit would have remained stable at 3.2 billion euros in the three-month period, VW said.

Third-quarter sales revenues, or turnover, advanced by 5.3 percent to 51.5 billion euros, while deliveries to customers fell by 3.4 percent to 2.392 million vehicles worldwide.

- 'Core strength' -

"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," said Matthias Mueller, who was parachuted in as new chief executive last month to steer VW out of a crisis that has wiped off more than a third of the company's market value.

"We will do everything in our power to win back the trust we have lost," vowed Mueller.

VW also makes Audi, Porsche, SEAT and Skoda cars along with luxury Bentley and Lamborghini vehicles.

Looking ahead to the full year, VW said that because of the charges, "we expect 2015 operating profit for both the group and the passenger cars division to be down significantly year-on-year."

Nevertheless, VW expected deliveries to customers in 2015 "to be on a level with the previous year in a challenging market environment," the report said.

And "depending on economic conditions, we expect 2015 sales revenue to increase by up to 4.0 percent above the prior-year figure," it said.

In 2014, VW sold 10.2 million vehicles worldwide and booked operating profit of 12.7 billion euros on sales revenues of 202.5 billion euros.

Industry experts say it is still too early to gauge the full extent of the scandal's fallout in terms of VW's reputation and sales.

But it and other global carmakers are also struggling with a slowdown in China and a recession in Brazil, two emerging markets which had accounted for a large portion of sales growth in recent years.

- 'Considerable charges' -

VW said that in addition to the 6.7 billion euros set aside "considerable financial charges may be incurred as legal risks crystallise".

In addition to criminal investigations in Germany and the United States, VW is also facing regulatory probes in France, Italy and now Spain.

Spain's National Court said Wednesday it has opened a preliminary investigation against the carmaker into possible fraud.

Investors were initially relieved at the shallower-than-expected quarterly loss and VW shares climbed 3.99 percent to close at 109.35 euros Wednesday.

The EU meanwhile offered Europe's reeling auto industry a reprieve on Wednesday, agreeing to ease pollution limits for diesel cars despite the fallout from the emissions cheating scandal.

EU member states agreed to phase in real-driving tests so that by 2020 car manufacturers will be allowed leeway of 50 percent above the EU limits on nitrogen oxide emissions, the European Commission said.

It was the major differences between the results in laboratory tests compared to ones in real driving conditions that prompted authorities in the US to confront Volkswagen, sparking the "Dieselgate" scandal.

Greg Archer, of anti-pollution NGO Transport & Environment, described the EU move as "disgraceful and legally questionable".

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