Still suffering from a diesel engine scandal that cost the CEO of Volkswagen his job, and may cost the German company $20 billion, Germany has given Volkswagen permission to repair 460,000 cars with the defect.
Only a month ago, U.S. authorities gave VW the nod to fix cars in the United States. This involves payments of $10,000 to some of the affected cars, and other options.
VW still faces penalties outside the United States, as well as scores of owner lawsuits.
Germany has made a partial settlement with VW, in the manufacturer’s home market, which should be something of relief. There has been anxiety the VW would have to lay off Germans because of the financial burden due to settlements, repairs and a possible drop in sales. None of those has happened, yet.
Volkswagen has received regulatory approval for technical fixes on an additional 460,000 diesel cars, the German carmaker said on Sunday.
Approval granted by Germany’s motor vehicle authority KBA affects models with smaller 1.2-litre diesel engines such as Volkswagen’s Polo subcompact and Spanish division Seat’s Ibiza model, VW said.
Chief Executive Matthias Mueller said at the company’s June 22 annual shareholder meeting that technical solutions on more than 3.7 million cars had been cleared by the KBA.
An emissions scandal affects 11 million VW vehicles globally including about 8.5 million VW group cars in Europe.
A good next step for VW, but with a long way to go in nations like China, the relief may be very temporary.
As a note, VW has 24% of the EU market, and is tied with General Motors Co. (NYSE: GM) for the lead of market share in China, the world’s largest. However, in the United States its market share is 2% and falling.