The Strategist

Volkswagen entered into $ 1 billion-worth settlement agreement in the US

12/21/2016 - 14:20

Volkswagen will pay about $ 1 billion to settle consequences of Dieselgate in the United States. The latest agreement, which the Federal Court confirmed on December 20, obliges the automaker to pay this amount to additionally repair or purchase additional 83,000 cars with 3-liter diesel engines.
In accordance with a settlement agreement, approved by the end of October, Volkswagen promised to pay a total of $ 14.7 billion for fraud with emission diesel engines.

President and CEO of Volkswagen Group of America Hinrich J. Woebcken called the last agreement the next important step in the company's quest to set things right for customers. Volkswagen has promised to buy out 20,000 vehicles from those 83,000, which are particularly difficult to bring into line with US environmental regulations. The company plans to bring remaining 63,000 vehicles to the environmental standard if the US regulators approve the planned repairs, or, as an alternative, to buy these cars out.

The latest agreement provides that $ 225 million of this amount will be spent on compensations of environmental damage to the US states and territories. Other $ 25 million will be allocated to support environmentally-friendly cars in California.

In October, Volkswagen has promised to spend $ 4.7 billion out of $ 14.7 billion within a program to reimburse for the harmful pollution, and promote environmentally friendly transport and its infrastructure.

Earlier, Volkswagen Group agreed to pay 2.1 billion Canadian dollars ($ 1.6 billion) of compensation for Dieselgate in Canada. The funds will be used to purchase or repair 105 000 cars with diesel engines, where illegal software was installed, and pay a remuneration to their owners. In June, Volkswagen made a similar deal with owners of 475,000 vehicles in the US and is going to spend about $ 10 billion on it. In total, the company is now ready to pay about $ 19 billion compensations for elimination of Dieselgate consequences in North America. 

Volkswagen has also agreed to pay an administrative penalty of 15 million Canadian dollars to the country’s government. Canadian courts are expected approve the agreement before the end of March. Most Canadian VW customers will receive from 5100 to 5950 dollars in compensation to price of their vehicles at its redemption, or will have their cars refurbished. 


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