Volkswagen's helm recently stated that no compensation will reach European customers who were affected by the "Dieselgate" emissions scandal.
In the United States, the carmaker already signed a $14.7 billion settlement with a group that includes the Environmental Protection Agency, car owners' lawyers and the Justice Department. Volkswagen's Chief Executive Officer Matthias Muller said that a similar action in the European market would be both unaffordable and inappropriate.
If you're in the States, read more details about the U.S. settlement and how compensation could apply to you in our coverage. If you're in Europe, read on for the bad news.
Last week, the European commissioner for industry Elzbieta Bienkowska urged the automaker to take into account compensating European owners of its affected diesel-powered cars. Bienkowska underlined that they should receive the same advantages as their U.S. counterparts despite being under a different legal system.
However, Mueller told Welt am Sonntag that the situation in Europe is entirely different.
He notes that in the U.S., the emission limits are more strict, which poses a great challenge for fixing the issue of each car. What is more, the buyback program is voluntary for customers in the U.S., a thing that does not apply in Germany.
Mueller went on to qualify certain compensations as "arbitrary" and pointed out that the high payments would "overwhelm Volkswagen."
The CEO states that although his company is still faring well financially, following the American precedent in Europe would have a severe impact on the carmaker's balance. To put things in perspective, 500,000 U.S. clients have cars that were tweaked to show a false amount of emissions. Europe, on the other hand, hosts almost 9 million such vehicles.
As the American regulators want to see as many cars as possible being bought back, VW must incentivize customers to enroll in the program. This means additional investments from the company to make good on its promises of resolving the Dieselgate issue.
European authorities did not succeed in launching an aggressive legal response to Volkswagen's admission that it installed cheating software on as many as 11 million diesel engines. This implies that the European Union has little chance to force Volkswagen to compensate its citizens as it did with U.S. customers.
Details of the carmaker falsifying emission reports came out in Sept. 2015, and the company's shares dropped constantly afterward.
The vehicle manufacturer pulled $18 billion of its profits to take care of the emissions scandal and recently stated that it keeps evaluating whether or not the sum will suffice. Mueller's recent statement seems to indicate that the carmaker will dig its heels in the ground to avoid the increasing costs of dealing with Dieselgate.
Volkswagen is currently worth $67.37 billion, 40 percent less than last summer.
