Report – Volkswagen to compensate dealers with $1.21 billion image

The Dieselgate scandal continues to grow and now we’re finding out about the most recent development – allegedly the German company has decided to pay its US dealers a total of $1.21 billion.

This is only a reported proposal for now, so the situation could change before an official announcement – but if it remains intact, the brand’s 652 dealers will receive over a period of 18 months an average sum of $1.85 million. The decision is not actually adding new financial burdens on top of the already known Dieselgate vows because it’s part of the $16.5 billion settlement that has been announced in August. The dealers will not share the same bounty though, with the most likely scenario being the payments will be adjusted according to the number of “defeat device” models sold by each venue.

The payments have been asked by the dealers as a means of recovering losses – with the sales representatives motivating the huge image hit caused by the emissions scandal has led to plummeting deliveries for many representatives. The dealers were also forbidden to sell any vehicles equipped with the TDI engines, so the automaker will have to buy back the vehicle that can’t be sold but have already been idling on the dealer lots. And he automaker has also agreed to suspend any “capital improvements” it may have asked from its dealers over a two-year period.