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Volkswagen to compensate US dealers for emissions impact

Volkswagen_Building_620Volkswagen has reached an agreement to compensate VW dealers in the US who have been hit by the diesel emissions scandal.

Details of the payments have not been disclosed although Reuters cites sources putting the figure at least $1.2bn (£908m).

In a statement Volkswagen said it was going to hammer out a deal with the US dealer council on how the payments would be made.

“Volkswagen has agreed to make cash payments and provide additional benefits to the dealers to resolve alleged past, current and future claims of losses in franchise value.

“Volkswagen and the dealers’ counsel will now work to finalize details of the proposed settlement, including how to apportion payments to dealers in the appropriate manner.”

The details of the deal are expected to be finalised by the end of September. Volkswagen has been suffering in the US with sales down 13.6% this year after a 5% fall in 2015.

“We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States,” said Hinrich J Woebcken, CEO of the North American Region, Volkswagen.

“Our dealers are our partners and we value their ongoing loyalty and passion for the Volkswagen brand. This agreement, when finalized, will strengthen the foundation for our future together and further emphasize our commitment both to our partners and the U.S. market.”

Steve Berman, managing partner of the dealers’ counsel Hagens Berman, said: “Our clients recognised the best solution would be one that not only allows them to recoup lost franchise value and continue to employ thousands of American workers, but one that also charts a strong course for the recovery of the Volkswagen brand in the United States.

“Now that there is a path forward for dealers, they can continue to work proactively to take great care of their customers, who are also VW customers.”

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