Volkswagen AG Close To Compensate US Dealers Hit By Diesel Emissions Scam

On August 25, 2016, Volkswagen AG finally announced that it has reached a tentative deal to compensate the losses that 650 VW dealers incurred not just during but also after the diesel emissions scam. The information was shared by the German carmaker and the layers for VW brand dealers during a court hearing in San Francisco, but the total amount of the settlement was not disclosed.

"We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States," Hinrich J. Woebcken, CEO of Volkswagen North America, said in a statement.

During the same court hearing, VW and the dealers told US district judge Charles Breyer that they will file the details of the entire settlement by the end of September this year. The deal would require the judge’s approval.

The German car manufacturer confessed that it had installed a software to mask the emissions produced by its diesel-powered cars. This act had affected over 11 million diesel vehicles worldwide. Earlier this year, VW agreed to buyback 4.75 lakh vehicles and pay up to $15.3 billion as settlement, in order to address the claims issued by the federal regulators in 44 US states.

Additionally, there were 85,000 cars sold by Porsche, Audi (both companies owned by VW AG) and VW which had 3.0-litre engines. These cars are not accounted for in the figures mentioned above.

Volkswagen’s attorney Robert Giuffra said that the company is ready to offer a fix for some of the affected vehicles by early November this year. This fix, he said, will bring the cars in compliance with emissions laws in place. He further clarified that any fix that the company will execute will be first approved by all the necessary government bodies.