Volkswagen AG has agreed to spend over $1.2 billion to compensate its 650 U.S. dealerships for their losses from the diesel emissions scandal, two sources informed on the matter said on Thursday.
Company and an attorney for Volkswagen dealerships revealed a tentative settlement at a court hearing in San Francisco, however refused to disclose the amount. The settlement, which followed talks that began in May, came as a judge ordered Volkswagen to move quickly to decide whether to fix or buy back 85,000 3.0 liter high-end automobiles with contaminating engines.
The settlement consists of $1.2 billion in payments for the decrease in worth of Volkswagen dealerships and added payments for cars that could not be sold, the sources said. Volkswagen has likewise consented to continue to ensure incentive payments to dealers, they stated.
“We think this contract in principle with Volkswagen dealerships is a really essential step in our dedication to making things right for all our stakeholders in the United States,” stated Hinrich J. Woebcken, primary executive of Volkswagen’s North American region.
The dealer settlement implies Volkswagen has accepted to spend a minimum of $16.5 billion in overall in the United States to deal with emissions problems. Volkswagen still faces billions of dollars in potential civil and potential criminal U.S. fines for breaching emissions laws, along with a possible expensive buy-back of cars geared up with 3.0 liter diesel engines.
