Dieselgate: VW reaches Canada settlement worth millions

The German automaker has agreed to a major payout to consumers affected by emissions-rigging software on diesel vehicles. A lawyer representing consumers hailed the deal as a "great outcome for Canadian consumers."

German automaker Volkswagen (VW) and a group of lawyers representing Canadian three-liter diesel engine owners and lessees announced a proposed settlement on Friday worth 290.5 million Canadian dollars (€191 million, $233.1 million).

Under the settlement, VW Group Canada will make cash payments to owners and lessees of three-liter VW, Audi and Porsche diesel vehicles that carried software that deliberately cheated emissions tests.

Daniel Weissland, president and CEO of VW Group Canada, thanked VW's customers for "their continued patience as a settlement for their vehicles moves toward approval."

Read more: VW says new diesel engines are clean

Business | 18.08.2017

"This is an important milestone towards making things right for all of our customers with affected diesel vehicles in Canada," said Weissland.


The disaster unfolds

About two weeks after Volkswagen admitted behind closed doors to US environmental regulators that it had installed cheating software in some 11 million of its diesel vehicles worldwide, the Environmental Protection Agency shared that information with the public. It was September 18, 2015. The ensuing crisis would eventually take a few unexpected turns.


The boss must go, long live the boss

Volkswagen's then-CEO Martin Winterkorn (above) had little choice but to step down several days after news of the scandal broke. In September, he tendered his resignation, but retained his other posts within the Volkswagen Group. Winterkorn's successor was Matthias Müller. Until taking the reins at VW, Müller had been the chairman at Porsche, a VW subsidiary.


Raiding headquarters

Regulators in the US weren't the only ones investigating VW. Authorities in Lower Saxony, the German state in which VW is based, were also scrutinizing the company. On October 8, state prosecutors raided VW's headquarters along with several other corporate locations.


Hell breaks loose

On January 4, 2016, the US government filed a lawsuit against VW in Detroit, accusing the German automaker of fraud and violations of American climate protection regulations. The lawsuit sought up to $46 billion for violations of the Clean Air Act.


Quit or forced out?

In March, the head of VW in the US, Michael Horn, resigned. In the initial days and weeks after the scandal broke, he was the one US authorities turned to for information. He issued an official apology on behalf of the automaker, asking for the public's forgiveness.



On October 25, a US judge approved a final settlement that would have VW pay $15.3 billion. In addition, affected cars would be retrofitted with better, non-deceptive hardware and software, or else VW would buy them back completely from customers.



When dieselgate first emerged in 2015, analysts said it was likely other car makers were also cheating tests. But it wasn't until 2017 that other companies were targeted in probes. In July, German authorities launched investigations into luxury car makers Porsche and Daimler for allegedly cheating emissions tests. Others, such as Audi and Chrysler, have also been hit by similar allegations.


Public still supportive

Despite dieselgate, VW has managed to keep the emissions scandal from utterly tarnishing its image. According to several polls, between 55 to 67 percent of Germans continue to trust the automaker. In the US, polls show that roughly 50 percent still believe the German company produces worthwhile vehicles.


Fuming over monkeys

In late January, however, VW suffered another heavy blow over reports that the company experimented on monkeys and made the animals inhale diesel fumes. To make matters worse, a separate experiment that had humans inhale relatively harmless nitrogen dioxide was revealed at the same time. Some media wrongly interpreted this to mean humans were also inhaling toxic fumes.

'Great outcome'

Sylvie De Bellefeuille, one of the lawyers representing the consumers, said the proposed settlement marked a major victory for Canadian consumers.

"This settlement is a great outcome for Canadian consumers and we hope it sends a strong message towards the industry," she said.

Read more: Can clean synthetic diesel fuels succeed?

As part of the settlement, Canada's civil consumer protection body agreed that alongside the class action payout, VW will pay 2.5 million Canadian dollars in a civil penalty. More than 20,000 vehicles are covered under the deal.

In September 2015, VW was rocked by revelations that several of its diesel models had been equipped with software that purposefully cheated emissions tests. The automaker has admitted that more than 11 million vehicles across the globe included the illegal software.

Related Subjects


The people's car

Did you know that Volkswagen - or the 'people's car' - was Adolf Hitler's brainchild, and that it was developed by Porsche founder Ferdinand Porsche? In 1938, Hitler even had built an entire city just to house the factory and its workers. First known as "City of the [Kraft durch Freude] Car at Fallersleben," it was renamed Wolfsburg on May 25, 1945. To this day, the city remains home to VW.


The world's #1 love-bug

From Hitler's wet dream on wheels to the world's favorite love-bug: The original Beetle - known in Germany as 'Der Käfer' - ruled the list of the world's best-selling car for much of the 20th century. By the time production was discontinued in 2003, more than 21.5 million Beetles had been sold worldwide.


Volkswagen's many faces

The company has come a long way since the 1930s. The Volkswagen Group's garage currently fits 12 brands under its roof. Audi, Bentley, Lamborghini, Porsche and Skoda are among its best-selling subsidiaries, accounting for 37 percent of 2014 sales.


Market domination

Today, Volkswagen really has become the "People's Car": The Group accounts for more than every third car - 36 percent, to be exact - sold in Germany.


1 out of 10 cars worldwide

Globally, more than 1 out of every 10 cars sold in 2014 was a Volkswagen Group brand. The company sold more than 10.2 million vehicles in that year. 7 out of 10 were sold outside Germany.


US market an uphill battle

The coveted US market has proven to be a real thorn in the eye for the German carmaker. Just 6 percent of its cars - or some 600,000 - were sold abroad. Despite huge investments, its market share there has been stuck at about 2 percent, trailing far behind competitors like GM, Ford and Toyota.


Pole position at stake?

In July, 2015 Volkswagen overtook Toyota as the world's top-selling carmaker. It's also the world's biggest automotive company by revenue. In 2014, it reported sales of 202.5 billion euros. Profit after tax came in at 11.1 billion euros. But after the emissions scandal, analysts warn VW's pole position could be at risk.


Global employer

As of December 31, 2014, the Group employed nearly 600,000 workers, making it one of the biggest employers worldwide. More than a third - some 270,000 - worked at one of its German locations.


Germany's biggest industry

The auto industry is the largest sector in the Germany economy, fuelled by the so-called 'Big Three' - Daimler, BMW and VW. Combined, the industry employs nearly 800,000 people - or almost 2 percent of the German workforce.


German cars drive exports

The German car industry's total revenue nearly topped 370 billion euros in 2014. It made up about one-fifth of the country's exports, and contributed around 3 percent to German GDP.

ls/cmk (Reuters, dpa)

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