Volkswagen's mass recall of polluting diesel cars in the United States is proving more difficult and costlier than expected, forcing the beleaguered German carmaker to set aside billions more in the third quarter.
Volkswagen (VW) announced on Friday that it was setting aside another 2.5 billion euros ($2.96 billion) to deal with the fallout from the Dieselgate scandal as its efforts to recall polluting cars in the US was proving to be "more complex."
The latest provisions would weigh on the third-quarter operating result, the carmaker said in a statement, as they bring the total sum set aside by Volkswagen to deal with fines and costs over the diesel scandal to 25.1 billion euros.
"The reason is an increase in provisions relating to the buyback/retrofit program for 2.0-liter TDI vehicles, which is part of the settlements in North America that is proving to be far more technically complex and time consuming," the statement added.
Since admitting to installing emissions-cheating software in 11 million diesel cars across the world, Europe's largest carmaker has been in talks with customers and governments over compensation and damages.
Volkswagen reached a deal in mid-2016 to compensate owners of cars in the US with 2-liter diesel engines. Under the agreement, the company either has to buy back the affected cars or modify them to bring them into compliance with US environmental laws. The group later also agreed to a similar settlement concerning some 80,000 3.0-litre cars.
More Dieselgate arrests
The German auto giant has been engulfed in crisis since 2015, and its legal woes are far from over at home and abroad.
German media named the arrested suspect as Wolfgang Hatz, who stepped down from his post on Porsche's management board last year after being suspended over the Dieselgate investigation.
Hatz was head of engine development at Audi from 2001 to 2007, before moving on to lead powertrain development at the VW group and then becoming research and development chief at Porsche, another VW subsidiary.
uhe/aos (AFP, Reuters, dpa)