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Volkswagen faces billions in fines

Volkswagen faces billions in fines

WASHINGTON: The US Justice Department has sued Volkswagen for up to $90 billion for allegedly violating environmental laws — five times regulators’ initial estimate and a reminder of the carmaker’s problems nearly four months after its emissions scandal broke.

Although such US lawsuits are typically settled at a fraction of the theoretical maximum penalty, analysts said the size of the claim meant Volkswagen (VW) could face a larger bill than previously anticipated.

“The announcement serves as a reminder/reality check of VW’s still unresolved emissions issues,” Goldman Sachs analysts wrote in a note, maintaining their “sell” recommendation on the stock.

VW shares fell as much as 6 per cent to a six-week low in early Tuesday trade, the biggest drop on Germany’s blue-chip DAX index. The civil lawsuit, announced on Monday, reflects the growing number of allegations against VW since the German company admitted in September to installing devices to cheat emissions tests in several 2 litre diesel vehicle models.

VW could face fines of as much as $37,500 per vehicle for each of four violations of the law, based on the complaint, which says illegal devices to impair emission control systems were installed in nearly 600,000 vehicles in US.

Courtesy : Dawn News



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