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VW Setting Aside $7.3 Bil to Cover Cost of Diesel Scandal

Regulators in other markets question whether VW also rigged their emissions tests.

by on Sep.22, 2015

Whether VW has set aside enough money to cover the scandal's mounting costs is unclear.

Volkswagen is setting aside 6.5 billion Euros, or $7.3 billion, to cover the anticipated cost of resolving its diesel emissions cheating scandal, a figure that could nonetheless be eclipsed by potential penalties and lawsuits facing the German maker in the U.S.

The issue, meanwhile, now is spreading to other markets, VW confirming it used the same illicit software – dubbed a “defeat device” by U.S. regulators – on 11 million diesel vehicles sold worldwide. That has triggered calls for new investigations in markets from South Korea to the European Union.

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The money VW has aside is part of the company’s efforts to “win back the trust of our customers,” the maker said in a statement Tuesday. Meanwhile, it noted that it is “working intensely” to find a technical solution to removing the software without reducing the performance of affected VW products.

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VW Halts Diesel Sales, Recalls 170,000 TDIs

Problem with potential fuel line leak.

by on Oct.06, 2011

The Audi A3 - named 2010 Green Car of the Year - faces recall due to the fuel line defect. Audi CEO Johan de Nysschen is shown accepting the award.

Volkswagen Group of America has taken the unusual step of ordering a stop sale on its imported diesel car line-up due to a problem with a high-pressure fuel line that can come loose and potential cause a fire.

The move impacts a variety of models including the Jetta TDI and Audi A3 TDI produced from May 2009 until a month ago when the defect was discovered.  The maker will need make repairs on vehicles now on dealer lots.  Meanwhile, it plans to issue a recall for those cars already in owner hands, a move that will affect about 160,000 Volkswagen vehicles and another 7,000 Audis.

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The recall is a potential black eye for a company that has put significant emphasis on its diesel technology as a way to differentiate itself from the competition.  Demand for the high-mileage powertrains has been strong and growing – reaching 30% with some Volkswagen models, according to company data.

VW has also been struggling to shed an image of poor quality.  It has lagged in many consumer studies over the past decade but has more recently begun to bring its quality problems under control.  Jonathan Browning, CEO of Volkswagen Group of America, has listed quality as perhaps the single biggest issue VW must deal with if it hopes to meet a goal of doubling sales by 2018.

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