Emissions scandal: VW to pay US dealers $1.21 billion

Volkswagen will pay $1.21 billion (Rs 8,050 crore) as compensation to the US dealers represented by lawyers Hagens Berman, who took legal action against the German car maker in the midst of the ongoing emissions scandal.

The sum equates to approximately $1.9 million (around Rs 12 crore) for each of the 652 affected dealers, but the exact amount of compensation awarded to each dealer depends on a number of factors, including the size of the dealer and market. The compensation will be paid within 18 months and certain unfixable models will be bought back by Volkswagen.

Steve Berman, managing partner in Hagens Berman, said before the deal was struck: “Our investigation has uncovered no evidence that VW dealers had any idea that VW was selling them cars that had defeat devices installed. These 652 mostly small business owners were blindsided by the diesel emissions scandal and have seen the value of their businesses plummet.”

The legal firm also noted that the actions taken against Bosch GmbH in the US were still ongoing and had not been settled as part of the Volkswagen settlement. It also stated that care was taken not to give the dealers preferential treatment over consumers affected by the scandal.

Around half a million cars in the US have been implicated in the scandal, with around 11 million vehicles affected globally. Volkswagen is maintaining its stance on not offering compensation to European customers, who make up a large proportion of those 11 million, because it says the fix here is more conclusive.

According to the US Department of Justice, the technical details of Volkswagen's proposed US fix are still being finalised. About half of affected US owners have requested to be paid compensation rather than receive the fix once it is issued.

Jimi Beckwith