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US Volkswagen dealers nearing agreement on dieselgate

VW will need to reach into its war chest to compensate its US dealers affected by the fallout of the diesel emissions scandal.
Tim Robson
Contributing Journalist

29 Aug 2016 • 2 min read

VW to offer large compensation package to its US dealer network in the wake of the diesel emissions scandal.

Volkswagen will need to reach more deeply into its war chest to compensate its US dealers, who have been heavily affected in the fallout of the diesel emissions scandal.

A number of VW diesel passenger and commercial vehicles, including the Golf and Touareg, were put under a stop-sale order by US federal authorities in the wake of revelations that nitrogen oxide emissions were up to 25 times higher than permitted, thanks to an inbuilt software cheat in its onboard computer systems.

In a preliminary deal signed off by Volkswagen USA late last week, the dealers are set to receive a cash payout from VW by the end of 2017 via a settlement fund, while VW has reportedly agreed to buy back used diesels from dealer stock that are considered "unfixable".

The company has already been forced to buy back cars directly from consumers in the US, as well as offering them cash and in-store credit.

Some 11 million cars worldwide have been caught up in the scandal.

The dealer compensation package, estimated to be worth A$2 billion, adds to the A$20 billion bill incurred by the company in August which will go towards compensating owners of 2.0-litre equipped diesel VWs, repairing the affected cars and contributing towards environmental programs.

Some 11 million cars worldwide have been caught up in the scandal, which broke in September last year.

Volkswagen Australia – which maintains that the nitrous oxide emissions issue doesn't apply to the local market – is still seeking approval from government bodies for fixes to locally sold cars.

Its managing director Michael Bartsch has said that repairing the 80,000 affected cars is the company's first priority, recently dismissing a number of class action lawsuits pending against VW Australia as "entrepreneurial litigation".

He also said that cars sold locally broke no laws or emissions standards.

Is VW doing enough to rectify the emissions scandal in the USA? Tell us what you think in the comments below.