Volkswagen under pressure to settle with European car owners

It has been more than a year since Volkswagen admitted to fitting cheat devices to nearly 11 million cars, but still the scandal rumbles on. Despite reaching a partial settlement in the US – at a cost of $15.3 billion – it has continually resisted making such a deal with European owners. Now the European Commission is starting to bring its voice to the issue.

The US deal will see affected owners compensated to the tune of $10,000 (€9,190) each and the introduction of a buyback scheme. Earlier this month, the firm reached a separate $1.2 billion (€1.1 billion) settlement with its 652 US dealers, each of which will receive a payout of $1.85 million (€1.7 million). Another deal may be on the cards for owners of cars with the firm’s three-litre diesel engine.

All this cash flow contrasts starkly with the position the firm is taking in relation to the European owners affected.

In a recent letter to the firm, EU consumer affairs commissioner Vera Jourová said VW “should clearly identify what will be offered to consumers, start compensating affected consumers and show clear proof that vehicles will be fixed within the coming year. As the diesel emission issue is the result of a behaviour that appears not to conform to several provisions [of EU rules on unfair commercial practices], the plan should offer to consumers supplementary advantages going significantly beyond what is usually offered to consumers when they are called to bring their cars back to workshops due to unintended or unforeseen technical problems.”

Besides urging Volkswagen to take steps towards voluntary compensation, the EU also wants the carmaker to open the possibility of repurchases in certain circumstances. Ms Jourova will meet again on Thursday with Francisco Javier Garcia Sanz, VW's top negotiator for diesel issues. European consumer groups criticised the outcome of the first session between the two in September, saying the action plan Volkswagen committed to is little more than the company's initial promise in December to repair vehicles.

Meanwhile, dozens of owners in Ireland and across Europe continue to pursue individual legal actions against the car giant. It remains to be seen how successful these will be. The fact that consumers can't pursue collective redress through a class-action lawsuit on this side of the Atlantic may prove an impediment to repeating the pressure brought to bear in the US for a settlement. That is why the representations at EU level are important. The motoring lobby carries a lot of weight in Brussels, but so do several million aggrieved motorists.