Volkswagen Dealers to Collect $1.85 Million Each as Owners Flock to Buyout Offer
Volkswagen AG is making nice with its once-ornery U.S. dealer network to the tune of $1.85 million per dealer.
The automaker announced details of its $1.21 billion dealer settlement late yesterday, Reuters reports, with cash payouts to its 652 dealers spread out over the next 18 months. Meanwhile, once-loyal Volkswagen owners have hopped on the buyout bandwagon in big numbers.
Of the 475,000 emissions-cheating 2.0-liter TDI models sold in the U.S., 311,000 owners have so far opted to take part in the customer settlement. For now, the only option is a buyback and cash payout, as regulators haven’t approved a fix for the polluting vehicles. Under the settlement, 85 percent of the afflicted vehicles must be off the road by June 2019.
Whether they’ve soured on the brand or aren’t confident Volkswagen can ever offer a fix, many are turning to the cash option. One longtime Volkswagen owner told TTAC that he’ll hand over his vehicle on November 2, claiming he doesn’t believe the company can find a fix —especially one that can be incorporated into his wagon.
About 3,300 owners have opted out of the settlement, preserving their right to fight the automaker in a class-action lawsuit.
A federal judge could sign off on the settlement on Oct. 18, after the U.S. Justice Department, Federal Trade Commission and lawyers representing U.S. owners gave their approval yesterday.
Under the dealer agreement, some of the automaker’s incentive payments will continue, and the company will buy back any remaining unsold diesel vehicles. Capital improvements to dealerships requested by the automaker are suspended. Also included in the agreement is the stipulation that Volkswagen can not sell any diesel vehicles in 2016 or 2017. (The automaker isn’t sure if it even wants to market a U.S. diesel again.)
While the agreement moves Volkswagen closer to its goal of putting the diesel nightmare behind it, its 3.0-liter diesel models remain in limbo. About 85,000 Volkswagen, Audi and Porsche 3.0-liter TDI models await a settlement in the U.S., with the automaker hoping for a technical fix. If it doesn’t find one by the end of October, its only option is another expensive buyback program.
[Image: Francis Storr/ Flickr]
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