Volkswagen was fined 1 billion euros ($1.18 billion) over diesel emissions cheating in what amounts to one of the highest ever fines imposed by German authorities against a company, public prosecutors said on Wednesday. Then, the automaker agreed to pay $4.3 billion to resolve both civil and criminal penalties relating to the installation of illegal software that allows its vehicles to circumvent USA emission tests. "Volkswagen is committed to its responsibility for the diesel crisis and sees this as another important step to its management", it said in a statement.
This means that the company admits that diesel cars were fitted with so-called "defeat devices" which worked out when they were having their emissions levels tested. This however concludes the regulatory offence proceedings against Volkswagen, which the automaker said would help in settling further administrative proceedings against itself in Europe, the report said.
VW is far from being out of the woods.
"Courts will now hardly be able to dismiss consumer complaints", said Jan-Eike Andresen of platform MyRight which has mandated USA law firm Hausfeld to pursue civil claims.
Volkswagen has said that prosecutors in the German city of Braunschweig levied the £880m fine, saying the carmaker failed to properly oversee its engine development department's activities, resulting in about 10.7m diesel vehicles with illegal emissions-controlling software being sold worldwide. "Further steps are necessary to gradually restore trust again in the company and the auto industry".
"The fact that the criminal risk has now been dealt with is good news", said Arndt Ellinghorst, an analyst with Evercore ISI.