Volkswagen AG is asking a judge to approve its $1.2 billion (Dh4.4 billion) agreement with its US dealerships for losses caused by its emissions-cheating scandal.
The proposed settlement increases the amount Volkswagen will pay to resolve US lawsuits over its emissions-cheating vehicles to $16.5 billion. Volkswagen is offering to buy back vehicles from its 652 dealerships under the same terms as those given to consumers, according to a filing on Friday in San Francisco federal court by attorneys for the dealers.
It’s been almost a year since Volkswagen admitted to systemically rigging environmental tests to hide its diesel emissions.
US district judge Charles Breyer is slated to consider the settlement on October 18, along with the $15.3 billion pact with consumers and US regulators that’s awaiting his final approval. Breyer signed off this month on Volkswagen’s $86-million agreement with the state of California to resolve unfair competition claims related to the scandal.
More than 65 per cent of the 475,000 US owners of diesel-cheating cars with 2.0-litre engines covered by the consumer settlement have registered to participate in it. Only 3,298 have said they won’t join in the class-action agreement, preserving their right to fight Volkswagen in court separately, according to a court filing on Friday. Other car owners have until September 2018 to decide whether to accept the terms of the deal.
Volkswagen issued a statement on Friday acknowledging the dealer accord was filed with Breyer.
While the company moves toward resolving a mountain of litigation over the scandal, it hasn’t offered a fix acceptable to regulators for 562,000 rigged diesel vehicles still polluting US roads. That includes vehicles with 3.0-litre engines. The pact with consumers requires Volkswagen to get 85 per cent of those cars off US roads by June 2019 to avoid further penalties.
Dealers were angry because they invested heavily in new, large stores in hopes of seeing the brand sell 800,000 vehicles a year, a goal set by former Volkswagen Chief Executive Officer Martin Winterkorn. The carmaker’s namesake brand sold 349,440 cars and light trucks in the US last year.
The company has earmarked 18 billion euros ($20.22 billion) to cover the fallout from the scandal. Most of the 11 million cars equipped with the defeat devices were sold in Europe, where a fix for some of the cars has been approved.
