Volkswagen compensation deals have still to be completed and settlement for financial losses agreed. Volkswagen AG is to spend over $1.2 billion to compensate US dealers for financial losses accrued from the diesel emissions scandal.
A tentative settlement was agreed at a San Francisco court hearing Thursday, although the amount of money concerned was not revealed. The settlement came after Volkswagen was ordered by a judge to make a quick decision on whether to buy back or repair 85,000 defective luxury vehicles with polluting engines.
The Volkswagen compensation settlement reached involves around $1.2 billion payments for the loss of value of its 650 dealerships, and for vehicles these dealerships could not sell because of the issue. The company also agreed to continue with certain incentive payments to dealers.
Hinrich J. Woebcken, Chief Executive of Volkswagen’s North American region, stated that the agreement in principle with VW dealers was an important step in the company’s commitment to make things right for all its ‘American stakeholders.’ Volkswagen dealers have been barred from selling any new diesel vehicles for almost a year.
The terms of the agreement state that VW will repurchase used diesel vehicles on dealers’ lots that cannot be repaired. The purchase will be made under the exact same terms that apply when vehicles are repurchased from independent dealers and consumers.
This deal may help “heal the wounds between Volkswagen and the dealers,” who have also suffered financially. Cars that cannot be sold must be the responsibility of Volkswagen and not the dealers. Many have invested millions in their Volkswagen franchises, and they should not lose out.
A U.S. District Court has now ordered the company to start talks regarding the 85,000 3 liter diesel models involving Volkswagen, Porsche and Audi vehicles. This could involve buy-back offers for these and could cost Volkswagen billions of dollars. The parties concerned have until November 3 to provide an update on progress while Volkswagen has until late October to submit plans specifically for the 3 liter models.
Pvt. Ltd.
