Apr 22, 2016

    VW 'to pay $6.7k to each affected US diesel car owner'


    VOLKSWAGEN (VW) has reached a deal with the United States authorities to settle the case over its cheating of diesel emissions tests that would involve it paying each affected customer US$5,000 (S$6,725), Germany's Die Welt newspaper reported on Wednesday.

    Citing unidentified sources close to the negotiations, it said that the agreement would be presented yesterday to Judge Charles Breyer in San Francisco, avoiding a trial.

    VW declined to comment.

    On Wednesday, the possibility of a settlement had boosted the carmaker's shares by 6.6 per cent, the biggest gain in Germany's benchmark DAX index.

    A US federal judge last month gave VW and regulators until yesterday to agree on a fix for nearly 600,000 diesel cars on US roads implicated by VW's emissions test-rigging scandal.

    The company does "not believe any expedited hearing or bench trial is appropriate or required", according to the agenda for the hearing yesterday at the San Francisco district court about VW's progress towards reaching a deal with the US Environmental Protection Agency (EPA).

    The plaintiffs - a committee representing thousands of consumers who say they were tricked into buying polluting diesel vehicles - proposed an expedited hearing or bench trial, or an expedited "all issues" trial, including punitive damages.

    Die Welt said the agreement did not include a detailed plan to fix the affected cars, nor were details fixed on fines and other compensation measures.

    One source said the deal would be fleshed out in the coming months.

    However, the owners of affected cars should receive US$5,000 each in compensation and VW will separately have to pay to fix their vehicles, the paper said.

    German lawyer Christopher Rother told Die Welt that plaintiffs in Europe would seek to emulate the US deal for their customers too.

    Earlier on Wednesday, two sources familiar with the matter told Reuters that VW would substantially increase the amount of money set aside to cover its emissions-test cheating scandal from the 6.7 billion euros (S$10.2 billion) currently earmarked.