(This story has been updated to reflect the cost of the new settlement.)
Two months after agreeing to a $14.7 billion deal with federal regulators over its cheating on diesel emissions tests, Volkswagen has reached another settlement covering its 650 U.S. dealers.
The maker will pay about $1.2 billion over the next 18 months to cover the losses dealers claim to have run up as a result of the scandal, in large part due to a sharp drop in the maker’s sales. Along with cash payments, VW will provide “additional benefits” to those dealers. The announcement moves Volkswagen closer to resolving its ongoing legal problems, though it still faces a number of additional challenges, including lawsuits by shareholders.
“We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States,” said Hinrich J. Woebcken, CEO of the North American Region, Volkswagen. “This agreement, when finalized, will strengthen the foundation for our future together and further emphasize our commitment both to our partners and the U.S. market.”