Oz Motoring Group Wants U.S. Dieselgate Deal Parity

Australian owners of Volkswagen Group vehicles are asking why their American counterparts are in line for compensation over the emissions-testing scandal, but all they are getting locally from VW is silence.

The Australian Automobile Assn. is calling for immediate “good will” payments to match those proposed in the U.S.

Under a settlement between Volkswagen and the U.S. Department of Justice subject to a federal judge’s approval, the automaker will pay up to $14.7 billion in claims stemming from its use of software designed to produce misleadingly favorable results of diesel-emissions tests, according to media reports Tuesday.

The settlement includes up to $10.03 billion to make cash payments of at least $5,100 to owners of cars equipped with the software. They also can opt to have VW buy back affected cars at their value before the so-called Dieselgate scandal broke in September, adjusted for options and mileage.

The settlement also allows leases to be terminated with no fee.

Owners of the 487,000 VW or Audi cars sold in the U.S. can choose to have their vehicles repaired instead of repurchased, but the government has not yet approved repair procedures.

CEO Michael Bradley of the Australian Automotive Assn. says Australian owners caught up in the scandal deserve better from VW than they are getting – and this could start with a goodwill payment.

“We know the ACCC (Australian Competition and Consumer Commission) is currently investigating this matter and we, along with Australians impacted by the scandal, would like to see this concluded as soon as possible,” Bradley says in a statement.

He says that in the meantime there’s nothing to stop VW showing good will to Australians unwittingly caught up in this situation and providing payment along the lines of what the automaker proposes giving American VW and Audi owners.

Initial Response Limited to Software Upgrades

A statement posted Tuesday on VW Australia’s website does not mention cash compensation, only that owners of 8,000 affected Amarok utility vehicles should contact their dealers for a free software upgrade.

VW Group Australia Managing Director Michael Bartsch says owners of other models later will be advised by email and by letter when their vehicle is due to receive its free software upgrade, inviting them to make an appointment with their dealer.

“This procedure does not have any material impact on vehicle performance, driving characteristics, fuel economy or compliance with emissions standards,” he says. “This has been demonstrated in the vehicles for which the upgrade has already been implemented.”

VW Australia is defending a class-action lawsuit in the Federal Court of Australia relating to diesel-emissions issues.

“The striking differences between U.S. and Australian regulations have gone largely unreported,” Bartsch says. “U.S. regulations are unique in the world in that they are very significantly lower than European standards in terms of (oxides of nitrogen) levels.

“Euro, and hence Australian, standards are built around lowering environmentally harmful carbon emissions and fuel consumption. We believe that the best outcome for concerned Australian customers is the free and simple software update.”

It’s not known when the ACCC will conclude its investigations or what penalty, if any, will be applied to VW.