Volkswagen settles with US 'dieselgate' owners

UPDATE 22/04/2016 10:00am: Volkswagen has now reached an in-principle agreement with US authorities to address the owners of about 482,000 2.0-litre diesel-powered VW and Audi vehicles fitted with emissions-masking software. A US judge announced in a court hearing in San Francisco overnight that VW has agreed to either buy-back, cancel the lease on or -- pending government testing and approval -- modify affected vehicles.

The deal is in addition to the “substantial compensation” announced yesterday (see below), but does not apply to about 80,000 3.0-litre V6-powered VW, Porsche and Audi models in the US, for which a resolution is yet to be agreed. Nor does it affect the US Justice Department’s ongoing criminal investigation into the VW 'dieselgate' scandal, or the ongoing probe of state attorneys general.

Exactly how much VW will have to pay in government fines for its emissions violations also remains unknown, and VW says it will announce a “comprehensive settlement in the coming weeks” to resolve the many class-action lawsuits filed against the company by affected owners.

------------------------------------

Volkswagen will compensate US owners of vehicles affected by its falsified diesel-engine emissions tests $5000 each in a deal reached yesterday.

According to Germany's Die Welt newspaper, the agreement will be presented to US Judge Charles Breyer in San Francisco today.

Given the almost 600,000 vehicles affected stateside, VW stands to lose $US3 billion from the deal, a substantial chunk of the $US7.6 billion the company set aside to cover the matter globally.

The amount comes in addition to the $1000 goodwill gesture already extended to affected owners.

Volkswagen has yet to formally comment on the matter, but has previously indicated there will be a recall notice issued.

It's believed plantiffs in Europe will seek to emulate the deal struck in the US, however, there is no word on any such action locally.

It's believed the expenses could cut as much as 70 per cent from Volkswagen's fourth-quarter operating profit, which is expected to fall to 992 million Euros. Australian owners affected are unlikely to see the same sort of largess.

In related news, Reuters and Automotive News have reported that the defeat device software at the heart of the scandal was first developed by Audi in 1999. But the software wasn't introduced in production vehicles until around 2005, when Volkswagen engineers were unable to bring nitrogen oxide emissions levels below the mandated ceiling.