Volkswagen faces renewed pressure over emissions scandal

Volkswagen is facing renewed pressure to repair the damage caused by its diesel emissions scandal, with the European Union calling on the carmaker to start compensating affected consumers and show clear proof that vehicles will be fixed within the coming year.

VW "should clearly identify what will be offered to consumers and this in a similar manner" across the 28-nation union, EU consumer affairs commissioner Vera Jourova told the company in a recent letter, a month after Volkswagen released an action plan with a proposal to give consumers more information about car repairs".

As the diesel emissions 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”, Ms Jourova said.

Criminal fine

The battle over compensation for EU car owners is one of several flashpoints from VW’s admission a year ago that it used software on about 11 million vehicles that allowed it to cheat on pollution tests.

The US is assessing how big a criminal fine it can extract from VW while investors have filed suits seeking €8.2 billion.

The European Commission in Brussels wants legally binding guarantees from VW that the car repairs will work and will not have any negative effect, an EU official said on condition of anonymity, as the talks are private.

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.

While Europeans get repairs, owners of American cars are entitled to a compensation package worth thousands of dollars.

Volkswagen did not have a spokesperson immediately available for comment.

Volkswagen’s pledge to fix affected cars in Europe by late 2017 needs to happen with “a very clear quantification of the situation of affected cars, by brands and types and for each EU country individually,” Ms Jourova said. “This mapping should be easily available on a central website and be regularly updated.”

–(Bloomberg)