Volkswagen has warned that compensation packages for European motorists who bought cars fitted with devices to cheat emission tests will not receive payouts on the scale of the €15bn package that the company agreed to in the United States.
Cheif Executive, Matthias Muller told German news outlet, Die Welt that doing so could bankrupt the company:
"You don't have to be a mathematician to realise that compensation at arbitrarily high levels would overwhelm Volkswagen," Mr Muller told the newspaper.
He added that the cost was particularly high in the US because it has stricter regulations which make refittings and repairs "more complicated."
Nitrogen oxide regulations are tighter in the US where 500,000 vehicles were affected by the scandal. Lawmakers there have required the company to take part in a voluntary buyback scheme - this is unlikely to be required in EU states.
There are 9 million cars in the Europe which were fitted with the devices - if the same costs were incurred as the US payout it would set the Germans back some €242bn.
Last week, the European Commission began a battle to force the car company to offer equal compensation to European customers.
Ireland
Legal proceedings are underway in Ireland - Liam Moloney, a solicitor who in acting on behalf of a number of Irish car owners told The Irish Times that, "Volkswagen Group Ireland should follow the lead of their US parent company and enter into fair settlement talks to properly compensate consumers who are at a loss as a result of their actions."
Last week, a statement from VW Ireland said, "There is no compensation for European customers. The relevant facts and complex legal issues that have played a role in coming to these agreements are materially different from those in Europe and other parts of the world."
In May, Fine Gael MEP Deirdre Clune has called on Volkswagen to compensate the more than 100,000 Irish motorists who were affected by the company's emission cheating.
Ms Clune is a member of the EU Transport Committee, she said the company "cheated its customers."
"VW customers in the US are to receive compensation, in the form of a mass buyback of affected cars, as well as compensation and committing funds to promote green automotive technology.
"I am calling on Volkswagen Ireland to begin engaging with its Irish customers as to a similar scheme of compensation immediately. Volkswagen’s offer thus far has fallen short of what is expected from a responsible manufacturer. Their inaction in Europe is an affront to their loyal customers," she added.
