Volkswagen’s North American operations will survive the diesel scandal mostly unscathed.
If you’re a US car owner affected by Volkswagen’s diesel debacle, things might not be going great right now. One look at the European market, however, suggests matters could be worse.
Not only are European VW owners not collecting the same “goodwill” package as US customers, but it appears that Europe will receive the majority of the automaker’s planned budget cuts.
In the United States, owners of diesel vehicles affected by the automaker’s emissions-cheating software are eligible to receive a benefits package totaling $1,000 (directly converted, about £660 or AU$1,400). This package includes a gift card that can be spent anywhere, along with a card that only works at participating dealerships.
Cost is likely a factor in the German automaker’s decision not to extend the same benefits to European customers. Only 480,000 cars are affected by Dieselgate in the US, compared to some 8.5 million vehicles in Europe. Offering a US-style package in Europe would cost the company about $8 billion by itself. In lieu of cash, VW will offer European customers a package meant to mitigate inconveniences caused by the recall’s forthcoming remedy, according to Automotive News, but details are scarce.
A Volkswagen Group of America spokeswoman confirmed to CNET that the US and Canada are both eligible for the goodwill package but would not comment on actions outside the North American market. The European arm of the company did not immediately return a request for comment.
In September, the automaker admitted to installing defeat devices on some 11 million diesel vehicles around the world. These cars used software to intentionally deceive emissions tests Once outside the laboratory and on the road, the diesels would emit pollution well above government limits. Volkswagen has set aside billions of Euro to cover the costs of fines, recalls and the like.
Some of that earmarked cash will come from budget cuts. The automaker has pledged to cut spending next year by approximately $1 billion, yet North American operations are walking away mostly unscathed. Automotive News reports that the only major cut to come to the Western Hemisphere is related to a paint plant in Mexico. VW’s near-billion-dollar Chattanooga, Tennessee, facility upgrade is soldiering on untouched — for now.