News ID: 154136
Published: 0716 GMT June 29, 2016

Volkswagen settles emissions cheating for $15.3b

Volkswagen settles emissions cheating for $15.3b

Volkswagen took a major step toward compensating owners and government regulators for its emissions cheating scandal. But it would take much longer to repair the damage to its reputation.

The German automaker agreed to spend up to $15.3 billion to settle consumer lawsuits and government allegations that its diesel cars cheated on US emissions tests. The settlement announced Tuesday is believed to be the largest auto-related class-action settlement in US history, AP reported.

Up to $10 billion will go to 475,000 VW or Audi diesel owners. VW agreed to either buy back or repair their vehicles, although it hasn't yet developed a fix for the problem. Owners will also receive payments of $5,100 to $10,000.

The settlement still must be approved by US District Judge Charles Breyer, who has set a July 26 hearing for preliminary approval. Final approval is expected in October.

Owners expressed relief that a plan is finally coming together nine months after the scandal was uncovered. But they're still angry. Diesel owners thought they were buying high-performance, environmentally friendly cars; they felt betrayed when they learned the vehicles' emissions vastly exceeded US pollution laws.

The scandal has also damaged VW-brand sales. In the first five months of 2015, before the scandal, Volkswagen sold 144,006 cars in the US.

 In the first five months of this year, the total fell 13 percent to 125,205. Sales at the company's other main brands— Audi and Porsche—are up, but they have fewer diesel models.

Volkswagen dealer Steve Kalafer of Flemington, New Jersey, says owners will likely welcome the buyback money but will shop elsewhere once they get it.

Kalafer says his sales are down 20 percent to 50 percent each month compared with a year ago.

Volkswagen gave a hint to its plan to restore its reputation last week, when it announced that it will introduce more than 30 electric-powered vehicles by 2025.

 

   
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