Europe's largest automaker, Volkswagen, says it will take a 16.2 euro billion hit to its 2015 results and slash its dividend, to help pay for its emissions-test cheating scandal. Kirsty Basset reports.
Volkswagen can't put a figure on the total cost of the diesel emissions scandal - but one thing is clear - it's taking a toll. Europe's largest automaker announced a 4.1 billion euro operating loss for 2015 amid a 16.2 billion euro hit to pay for the so called Dieselgate settlement. According to CEO Matthias Mueller, the 16 billion euro figure includes the cost of technical fixes for cars that violate clean air standards, buybacks of vehicles and legal costs. It comes a day after reaching a framework deal with U.S. authorities. SOUNDBITE (English) VOLKSWAGEN CEO MATTHIAS MULLER SAYING: "After months of intensive discussions and efforts we achieved a fundamental agreement with the U.S. authorities. This is an important step towards winning back the trust of customers, dealers and the public in the United States of America." But the group still faces U.S. Justice Department fines as part of an expected civil settlement and an ongoing Justice Department investigation that could lead to criminal charges. (SOUNDBITE) (German) HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "With VW, the problem hasn't been solved yet, but I think they've got the bull by the horns and can rein it in." But the company has a long road ahead as it tries to build bridges and make amends. (SOUNDBITE)(English) CHIEF ECONOMIST, WORLDFIRST, JEREMY COOK SAYING: "I think there's also the reputational damage we have to think about here...I think there's going to be a long-held distrust of the brand." And with the U.S. deal potentially offering billions in compensation and buybacks for North American owners, there's also the matter of millions of VW drivers in Europe who believe more should be done for them.