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Volkswagen emissions scandal: VW to pay $1.21 billion as settlement to dealers

The company had admitted to installing improper software that deactivated pollution controls on more than 11 million vehicles sold worldwide. Photograph: (Getty)

WION Washington, United States Oct 01, 2016, 05.45 AM (IST)

Volkswagen on Friday announced it will make $1.21 billion in payments to 652 US dealers as part of its $16.5 billion diesel emissions settlement to date. Under the agreement, the dealers will receive an average of $1.85 million each on average over 18 months. 

As part of the settlement with VW brand dealers, the company will continue making some incentive payments to dealers, buy back diesel vehicles that dealers can't sell and suspend capital improvements for two years that it wanted dealers to make. A federal judge must still approve the settlement.

Fearing it will ever sell diesel vehicles in the United States again, VW also agreed to spend up to $5.3 billion to address claims by federal regulators and 44 US states. 

VW is still in talks with the Justice Department and Federal Trade Commission for approval to buy-back 4,75,000 polluting diesel cars and the proposed fixes for the 2.0 vehicles.

"The United States will continue to vigorously pursue its claims for civil penalties to fully hold (Volkswagen) accountable," the Justice Department filing said Friday.

The carmaker faces billions of dollars in potential civil and criminal US fines for violating emissiosn laws. It will also buy-back 85,000 vehicles equipeed with 3.0 litre diesel engines if it fails to convince regulators that they can be fixed. 

The company has been barred from selling all diesel vehicles in the United States since late 2015, after it admitted to installing improper software that deactivated pollution controls on more than 11 million vehicles sold worldwide. 

(WION with inputs from agencies) 
 

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