Volkswagen AG seems to have finally come to an agreement with the US government authorities. The German auto giant will be re-purchasing almost 5,00,000 diesel cars that were fitted with the defeat device in the US as part of the infamous dieselgate scandal. The sophisticated software recently revealed to have been developed by Audi AG was used to manipulate emission results in the States, with the actual emissions being almost 40 times higher than the permissible limit.
The 5 lakh cars that will be bought back by Volkswagen are all fitted with the 2.0-ltre four-cylinder TDI diesel engine and includes cars like the Jetta, Golf as well as the Audi A3 sedan that were sold since in the US since 2009. The 80,000 odd cars fitted with the 3.0-litre diesel engine however, are not being re-purchased despite having exceeded the pollution limits. The 3.0-litre oil burner powers several models under the VW umbrella from brands like Audi and Porsche.
Also Read: Audi Admits It Created Dieselgate Software Used by Volkswagen in 1999
Furthermore, the settlement also includes Volkswagen setting up a compensation fund for owners, which is expected to amount to $1 billion, in addition to the cost of buying back the vehicles. It is not clear as to the amount of compensation each of owner will receive. However, the compensation will be given to those owners who either sell back the car or get the repairs made. In case of a buy back, the Volkswagen will make the purchase at the car's value before the scandal broke out.
It is believed that owners will be given two years to decide whether they wish to sell the car to Volkswagen or have them repaired. It is not clear though if the defective cars will make it to the second market via the automaker.
Surfaced in September last year, the Volkswagen dieselgate scandal affected the automaker massively with over 11 million cars found to have been affected globally. The scandal not only tarnished the German automaker's reputation globally, but also saw a bulk of law suits being filed against the Beetle maker in certain countries. It is reported that the company is still negotiating terms term with the US government authorities and we can expect an official statement in a few days. Stay tuned for complete details.
Source: Reuters
