HomeCar NewsVW to pay $1.21 billion (INR 8,050 cr) to US dealers over...

VW to pay $1.21 billion (INR 8,050 cr) to US dealers over dieselgate

As per a settlement agreement filed in the Federal Court in San Francisco, VW will compensate its US dealers upto $1.2 billion. This is lieu of losses suffered due to the company’s emission cheating scandal.

Even as each dealership is expected to receive $1.85 million, they also have the option of either accepting this amount or they can continue to pursue their individual law suits against the company. No such compensation has been announced for dealers in India as of now.

Volkswagen sales across the US has suffered a setback following the company’s emission cheating scandal that came to the fore last year. The dealers argued that they lost substantial value of their dealerships and hence demanded compensation from the company.

The company is expected to compensate a total of 652 Volkswagen franchise dealers as of September 18, 2015. The company will also be spending upto $10 billion on buy-back or repair of around 475,000 vehicles involved in the scandal besides paying each owner between $5,000-$10,000 each. This settlement also includes over $2.5 billion for environmental mitigation and $2 billion to promote zero emission vehicles.

The VW Dieselgate Scandal which broke out in September 2015 came to light when California Air Resources Board and EPA found tweaked software in the company’s 2-liter diesel vehicles were showing cleaner emissions during testing while in actual fact these very vehicles were spewing upto 40 more amounts of nitrogen oxide as is legally permissible.

This defeat device, as it was called, was installed in many VW Group cars, including that of Audi and Skoda across the world. Affected VW and Audi diesel vehicles and include 2010-15 Golf and Golf Sportwagen TDI models, 2012-15 Passat TDI, 2010-13 and 2015 Audi A3 TDI, 2009-15 VW Jetta and Jetta SportWagen TDI and 2012-15 Beetle TDI.

Sales of Volkswagen models in the US fell 14.6% during the first 6 months of 2016 as compared to sales in the same period of the previous year.

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