Diesel cars previously made up a significant portion of Volkswagen’s USA sales, but those models were pulled from showrooms when the Environmental Protection Agency revealed the carmaker’s use of illegal software to cheat on emissions tests last September. The settlement, which followed talks that began in May, came as a judge ordered VW to move quickly to decide whether to fix or buy back 85,000 luxury vehicles with polluting engines. The settlement includes cash payments and “additional benefits” to dealers, though final details of the settlement – including the total amount of compensation – have yet to be worked out. But it did more than affect bottom lines and public opinion – it also messed with VW’s dealers, many of which have been the first point of contact for peeved owners.
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VW reached a $14.7 billion agreement with vehicle owners and US and California regulators that calls for buying back or fixing 480,000 Volkswagens with 2.0-liter engines.
Dealers are angry because they invested heavily in new, large stores in hopes of seeing the brand sell 800,000 vehicles a year, the goal set by former Volkswagen Chief Executive Officer Martin Winterkorn.
VW’s USA dealers have been barred from selling new diesel vehicles for almost a year.
Meanwhile, Volkswagen indicated it has reached a settlement deal in principle with USA dealerships over diesel-cheat losses.
The Marine Corps says it misidentified two of the servicemen who helped raise the first US flag at Iwo Jima during World War II.
Breyer told the company to submit a plan for fixing the 3-liter engines and proof that it works to US regulators by October 24 and report back to him on November 3.
Breyer set a November 3 hearing for an update on the status of the talks and emphasized the urgency of resolving the issue.
“I want to have a strong sense of urgency”, Breyer said.
The carmaker is now working with its dealers’ counsel to finalize details of the proposed settlement, including how to apportion payments to affected dealers.
“We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States”, said Hinrich J. Woebcken, CEO of VW North America.
The automaker previously agreed to pay $14.7 billion to settle consumer lawsuits and government allegations related to its admission that it rigged hundreds of thousands of cars to cheat US emission standards.
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Since the U.S. Environmental Protection Agency has yet to approve any of VW’s proposed remedies for the cars, it could be years before any of the vehicles are taken off U.S. roads, a possibility that may increase fines and penalties against VW.
