Volkswagen refuses to pay out to European customers to resolve emissions scandal

Volkswagen refuses to pay out to European customers to resolve emissions scandal

After Volkswagen resolved its emissions scandal in the US by paying $15bn, over 9 million European customers also demanded to be paid for emissions scandal. But the car manufacturer rejected to pay out to its European customers.

Chief Executive Matthias Muller during talks with European Commission Industry representative Elzbieta Bienkowska in Brussels revealed that their company does not want to pay compensation to its European customers who bought the company’s default cars.

Muller said there are tougher regulatory standards in the US that make it more difficult for them to modify cars to help fit the guidelines, but this was not the problem in Europe. Muller was in Brussels giving explanation for their refusal, the same day company's lawyers were busy in the US.

There could be another reason. Volkswagen is in a situation if it would pay out to its 9 million European customers, it will cause the company more significant financial harm compared to paying only 500,000 in the US. Last week, company agreed to pay $15bn compensation to its US customers. If the company decided to pay Europe to resolve the scandal, it could cost €40bn to the company.

"Volkswagen is solid financially, but you don't have to be a mathematician to see that damage payments in some arbitrary amount would even be too much for Volkswagen to cope with", said Muller as told to German Sunday newspaper Welt am Sonntag. Commissioner Bienkowska said what she believes to be unfair treatment of its European customers.

Last year, Volkswagen took charges of $18.05bn in order to cover the costs of the faulty vehicles in Europe and settlement costs in the US.

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