The emission test cheating scandal has been the biggest issue that Volkswagen has faced to date. The German company is now planning on increasing the $6.7 billion it had set aside for the emission test issue.
As reported by Forbes, Volkswagen has been found guilty of installing software devices that made their vehicles perform better in emission testing. From then on, the German automaker has been the subject of the investigation from the US Justice Department, the Environmental Protection Agency, the Federal Trade Commission and the State of California. Foreign regulators and plaintiff representatives have all also been gearing up for a class-action lawsuit.
An analyst from market research firm Evercore ISI, Arndt Ellinghorst, said he expects that the total damage of the dieselgate scandal would reach up to 30 billion euros. The German company has also been planning on increasing the amount it set aside for the scandal to double-digit billion euros. The final amount will still depend on the outcome of the talks with US regulators, Federal Trade Commission, and the Justice Department as per Reuters.
VW has been given by a US federal judge until April 21 to agree to fix up to 600,000 diesel cars on US road implicated on the company's manipulation or risk facing trial. Experts say that the deal with the US authorities would remove some road blocks in investing back to VW. Shares of the company has lost billions in value since the scandal broke out. The possible settlement has increased VW's shares to 6.6 percent.
According to the Examiner, VW top executives on the other hand, have agreed to cut significant bonuses in order to help quell an incipient revolt of its political and labor allies. The executives believe that the bonuses are excessive considering the fact that they are still facing staggering multi-billion euro losses.
The company, however, firmly believes that a trial is no longer required or necessary. VW is also making progress towards reaching a deal with the US Environmental Protection Agency (EPA).
