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VW posts steep 2015 loss in wake of Dieselgate

Scandal-hit German carmaker Volkswagen announced a full year operating loss of 4.1 billion euros ($4.6 billion) for 2015 on Friday, after its earnings took a huge hit from costs arising from Dieselgate.

Volkswagen hadn't posted a full year in the red since 1993, but on Friday the Wolfsburg-based carmaker reported a net loss of 1.6 billion euros ($1.8 billion).

The results came in stark contrast to VW's 2014 performance - a profit of 10.8 billion euros - albeit at a time when the company was fitting its vehicles with defeat devices to allow it to pass fuel emissions tests.

News of the steep loss came in the wake of VW's move to substantially boost its provisions to cover the cost of the scandal - after it reached a deal with US authorities to compensate customers and fix its dirty diesel cars.

Volkswagen has set aside 16.4 billion euros ($18.5 billion)

to cover additional costs

arising from a deal Thursday with US authorities, including a $5,000-payment to each affected US customer.

The cash reserve was an increase of almost 10 billion euros over a previous provision made by the carmaker following revelations in September that it cheated on diesel emissions tests. The sum is expected to be stretched over two years.

Watch video 00:58

VW reaches deal with US government

A matter of perspective

"Were it not for the sizable provisions we made for all repercussions of the emissions issue that are now quantifiable, we would be reporting on yet another successful year overall," VW CEO Matthias Müller said on Friday at a meeting of the group's supervisory board.

At that meeting it was also annouced that all top managers would see a 30-percent cut to their bonuses for the full year, following fierce debate over executive pay in the wake of the Dieselgate scandal.

A closer look at the agreement revealed, though, that the 30 percent in question would be turned into virtual shares and frozen for a period of three years. If the price of VW shares rises by at least 25 percent by the end of that period, the value of the frozen shares will be paid out in full, meaning that executives could even make extra money out of the scheme.

Volkswagen confirmed that it is delaying the publication of the investigation into how the scandal came to pass.

The group said that delay was due to “unacceptable risks" for the group, including higher litigation and compensation costs.

hch/hg (AFP, dpa)

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