VW Group boss Matthias Müller has said that offering European customers a US-style compensation and buyback package would be inappropriate
4 July 2016

Volkswagen has held its stance on European compensation following the emissions scandal, despite pressure from European leaders, including the British government, for it to offer a compensation and buyback package like the one offered in the US.

Volkswagen Group boss Matthias Müller told German newspaper Welt am Sonntag that offering a similar package would be inappropriate and unaffordable, with the total cost in the US alone amounting to $15 billion (about £11.3 billion at current exchange rates).

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"You don't have to be a mathematician to realise that compensation at arbitrarily high levels would overwhelm Volkswagen," he said.

Müller explained that in the US the emission limits are stricter, meaning a quick-fix like the one offered to European owners is not possible. He added that offering Europeans a buyback option like the one seen in the US wouldn't work because of the different laws and regulations here.

Reaffirming his point

This isn't the first time VW's CEO has rejected calls to offer Europeans compensation. Earlier this year Müller spoke to Autocar at VW's annual meeting in the UK, stating that customers were unlikely to be offered a similar deal because the situation is very different on this side of the Atlantic.

"The overall situation differs between European countries and between the US and Europe," he said. "For instance, when we compare Europe with the US a complete carry over of what is under discussion in the US to the other parts of the world will not happen."

Müller explained that since the car maker's European emissions fixes shouldn't hinder performance, the situation was entirely different.

"It is our goal and so far we have stuck to this that the refitting of our vehicles will not lead to a lower performance or affect fuel consumption. That was our goal and so far we have been able to implement it."

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US owners might find themselves with reduced fuel economy after the fix is applied, however, so VW is offering to buy back diesel cars affected by the scandal there. It is also offering owners "substantial compensation" of $5000 each.

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UK government pressure

Asked about the announcement of compensation in the US by the Belfast Telegraph, Prime Minister David Cameron's spokeswoman said earlier this year: "It is for VW to explain the approach that they are taking in different jurisdictions. The Government has pressed VW on the issue of this kind of compensation.

"We expect VW to treat its UK customers fairly and to adequately address their concerns. The Transport Secretary has pressed VW on the specific issue of this discrepancy of compensation."

Despite growing pressure, VW has maintained that it does not believe it has broken any European emissions laws through the fitment of its test cheat software.

Compensation, buybacks offered to US customers

In the US, the offer to buy back cars at market value applies to all 500,000 2.0-litre diesel engined VWs caught up in the scandal. Presiding US district court Judge Charles Breyer gave scant details of the agreement during the US hearing but revealed that VW would also pay into an environmental fund and commit other money to promote green car technology.

Breyer only described the compensation offer as "substantial" but unconfirmed reports suggest VW will pay customers affected by dieselgate $5000 (about £3500) each. VW will also cover all the costs to remove defeat devices from affected cars, which were found to be running with software that enabled them to cheat emissions tests back in 2015.

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The car maker revealed it has set aside more than £12.6bn, with £6bn for repair or repurchase deals and the rest for litigation, including fines and legal fees.

VW lawyer Robert Giuffra described the first court agreement as a positive step in the firm's to win back customers: "Volkswagen is committed to winning back the trust of its customers, its dealers, its regulators and all of America. These agreements are an important step forward on the road to making things right."

Analysing the deal, Christian Stadler, Professor of Strategic Management at Warwick Business School, said: "What is still uncertain is whether this also resolves issues Volkswagen has with the US Justice Department. There is a pending civil suit and an on-going criminal investigation. If this deal manages to also resolve these issues it is really great for Volkswagen."

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Comments
22

21 April 2016
This doesn't seem right, what loss has the consumer suffered? I'm very doubtful they checked the NOx figures before buying their vehicle. Surely its the people in the cars behind who suffered more?

21 April 2016
It's a reasonable outcome and would perhaps suit a majority of Volkswagen buyers over in the States. Poor UK and European sods can meanwhile revel in a cheap mesh solution that doesn't solve anything.

21 April 2016
fadyady wrote:

It's a reasonable outcome and would perhaps suit a majority of Volkswagen buyers over in the States. Poor UK and European sods can meanwhile revel in a cheap mesh solution that doesn't solve anything.

You're boring. You have nothing new or interesting to say. Nor do you comment on anything else. This isn't really an important issue : so it kicks out a bit more pollution, so what?


21 April 2016
Thanks to the media broo-haha over Dieselgate any VAG diesel has lost value compared to what it would have been worth without the scandal. Additionally, the increased fuel consumption leads to additional costs over and above what would have been paid by the owner if the vehicle actually met its stated figures. Personally, I think all of the money should go to the owners of the vehicles with nothing going to the governments by way of fines. It was the governments' collective ineptitude that allowed this by not bothering to carry out independent tests. I think that VW should offer owners to swap to EU6-compliant vehicles for no charge or to take the money and free fixes. Whatever side of the fence you come down on the alleged impact on the environment we can all agree that this is a blatant case of false advertising and breech of faith between the company and their customers thus it should be the customers alone that get recompense.

22 April 2016
Firstly where is your evidence that the cars have depreciated more than they would have? Are you able to give us a figure? And secondly what do you mean by 'if the vehicle actually met its stated figures'. Perhaps you can list those cars which do meet their stated figures - any manufacturer - any power source, petrol or diesel or even electric, parafin, hydrogen, wound up elastic band, we're not fussy. Nobody meets the stated figures because nobody drives their car like a laboratory test.

22 April 2016
Don't buy VAG products. Is there an on-line petition already?

22 April 2016
all my cars have never reached the sold for figures...why are you all surprised, you all know they dont, u just think the next one will be better. but hey its just the same. ive had a saab 9000 that did 3mpg never better than 21pmg, but its the enjoyment of owning the car and driving it as u want. my new GLA is no different u drive it as u want to drive it and accept the mpg, its your fault not the manufactures who get the car ready for the test and know the real world is a mile away. its the same with exams, get real people, teachers teach for the test not the whole subject. its the tables we want then find out its not how we thought it would be...

22 April 2016
Only one car I have ever driven met and sometimes bettered the combined figure as indicated by the displayed mpg - this being a Suburu 2.0 boxer diesel Legacy Outback.

My MK1 Focus 2.0 was never to far off its advertised MPG.

The worst culprit I have driven was a 1.3 90bhp Mito mid to early 40's no where near the mid 60's as stated.

23 April 2016
Most vw "owners" don't own the car ,vw owns the car through its finance arm and leases it to the "owner" using pcp contracts which tells you that you never own the car. So that by my reckoning means nearly all "owners " in the uk aren't really owners at all and are not entitled to any compensation at all.
K. M

24 April 2016
Lot of moaners on here who are just peed off that someone might get some compensation for being ripped off. V/W group made claims for their cars that were untrue. Only the US is strong enough to force them to recall and deal with the matter properly. The British government is too close to rich industrialists to look after the consumer properly. The cars do not meet EEC emissions and the company should be made to recall them and deal promptly with the issue. I have now had a second letter from Skoda which is just a copy of the first sent months ago with the usual bland statement that they are looking into it and at some time in the future will do something Its just not good enough

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