VW takes $18-bn hit on emissions scandal, reports $1.53 bn 2015 loss
25 Apr 2016
German carmaker Volkswagen AG on Friday reported a record net loss of €1.36 billion ($1.53 billion) for 2015 as it set aside €16.2 billion ($18.2 billion) to cover the cost of fines, legal claims and recalls in the United States and other countries related to diesel emissions cheating.
Volkswagen said the money it was setting aside to pay for the scandal would drive it to a 2015 net loss of €1.36 billion, the largest in its history and the first on an annual basis since 1993.
Volkswagen, which will release its full results on 28 April, said it would also slash its dividend to help pay for its emissions-test cheating scandal.
Volkswagen had, on Thursday, arrived at a framework settlement with US authorities to buy back or potentially fix about half a million cars fitted with illegal test-fixing software, and set up environmental and consumer compensation funds.
Wolfsburg-based Volkswagen is yet to assess the full costs, including potential US Department of Justice (DoJ) fines as part of an expected civil settlement, and a DoJ investigation that could lead to criminal charges.
Volkswagen said it could not release preliminary findings from an investigation it commissioned from US law firm Jones Day until it had reached an agreement with the DoJ.
Chief executive Matthias Mueller also said he could not put a figure on the total cost of the scandal - which some analysts have estimated at about $30 billion.
Volkswagen said it planned to pay a dividend of €0.11 per ordinary share and €0.17 per preferred share on its 2015 results, down from 4.80 and 4.86, respectively, the year before.
It also said executive bonuses for 2015 would fall by an average 39 per cent from the year before.
Volkswagen, which has described 2016 as "a year of transition", said it expected deliveries to be on a par with last year's 9.93 million cars, with revenues falling as much as 5 per cent due to weak demand in South America and Russia.
There are also questions over whether it will offer compensation to those outside the United States.
Meanwhile, the rot seems to have spread wider in the automobile industry, with Germany-based automakers, including Mercedes-Benz, and Opel, also agreeing to recall a total of 630,000 cars to fix diesel engine technology blamed for high pollution.
