German car manufacturer Volkswagen is set to face a U.S. judge this week on the Dieselgate fix after they admitted to installing faulty emission devices in 11 million diesel-operated cars. The US court is expected to receive solutions from Volswagen on how it will solve the Dieselgate scandal that involved more than 500,000 diesel cars.
VW was caught under fire for the diesel emission scandal worldwide. However, it faced greater scrutiny under the US regulators, Environmental Protection Agency (EPA). The German car company was given until March 24 to fix the scandal, but U.S. Judge Charles Breyer extended the deadline until April 22. The International Business Times reported that the judge may also consider VW's trial during the summer if the company fails to meet the April deadline.
"[VW] are under the gun themselves, and not just from Judge Breyer," Stephen Reitman, analyst at Société Générale, told Financial Times, adding, "They need to quantify the liability in order to make provisions."
Meanwhile, as VW faces dozens of lawsuits from the owners of diesel cars with faulty emission devices and fines from the regulators, Scotsman reported that the German automaker is struggling to overcome the dieselgate emission scandal. The publishing claimed that the company experienced 1.3% fall in revenues in the first quarter of the year. Worldwide deliveries also plunked down to 2.7% in March. An analyst, Christian Stadler, a professor of strategic management at Warwick Business School said that although VW faces dieselgate emission scandal, the company seems to be back on track since the damage hasn't been massive.
"While the numbers are down, it is actually a far cry from what one would have expected. Of course, that the VW brand has been hit more than others is no surprise, but, considering the furore of 'dieselgate' we have definitely not witnessed the demise of the Volkswagen Group that some expected, he said. Stadler also added that even with a downturn, it's not massive for VW. He emphasized, with recorded history of scandals, people easily move on and forget.
Sales in China were surprisingly high. As Ft reported, VW's deliveries increased by 6.5%. It was so far the highest quarterly sales ever recorded since the company entered the market. In the US, quarterly sales dived down to 12.5% while South America sustained 31% drop.
According to experts, solution for the faulty VW cars will be very costly. In January, VW's CEO said that it has reserved 6.7 billion euros or nearly $7.6 billion to fix its defective cars globally.
