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VW Finance Unit Takes Writedown Against Impact of Diesel Scandal
Volkswagen Financial Services AG has set aside €353 million ($382 million) to cover the possible drop in trade-in value for leased vehicles tainted by the company’s diesel emission cheating scandal.
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Volkswagen Financial Services AG has set aside €353 million ($382 million) to cover the possible drop in trade-in value for leased vehicles tainted by the company’s diesel emission cheating scandal.
The company’s separate U.S. financial unit, VW Credit Inc., has taken its own writedown of €96 million ($107 million) for the same purpose, Reuters reports.
VW admitted last September it rigged 580,000 diesels in the U.S. to trick emission tests. A month later used-car pricing guide Kelley Blue Book said resale values for VW diesels had dropped an average 13%, or $1,700.
VW indicated in December it would compensate U.S. owners for any loss of resale value of their diesel-powered vehicles.
The carmaker also says that a lack of agreement with federal officials on how to remedy the U.S. diesels leaves the final recall cost unclear in that market. VW has said it might buy back some of the affected vehicles, but it has not yet booked a writedown to cover the program.
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