CB BureauIn October, as part of the fallout from the emissions-cheating scandal, Audi agreed to pay a fine of €800 million, or about $930 million, in Germany. The fine was for failure to properly supervise employees who devised and executed this cheating scheme.
However, this settlement only resolves civil claims against the company. The criminal investigation of Audi executives that resulted in the arrest of former chief executive Rupert Stadler is still ongoing. Audi is a part of Volkswagen’s luxury-car division.
The Volkswagen cheating scandal, which erupted in December 2015, has already cost the company more than $32 billion, including those from fines and lawsuits. The final cost is likely to go up as shareholders are suing the company to the tune of €9 billion in German courts. The US Department of Justice has already filed criminal charges against Martin Winterkorn, ex-CEO of Volkswagen America, while a case brought on behalf of almost 60,000 affected vehicle owners in the UK was heard in the high court in London earlier this year.
The scandal primarily revolved around the usage of a ‘defeat device’, which is a software in diesel engines that can detect when they were being tested for emissions rate and change the performance accordingly to improve results. This was discovered by the Environmental Protection Agency (EPA). Since then the company has been embroiled in managing this huge controversy, with several countries across the globe taking action against it. The financial and reputational loss has been massive, to say the least. CB ran a detailed report on this scandal which you can read here. The Volkswagen scandal has also engulfed almost all of European carmakers, with similar cheating discovered at these companies, including Opel and Daimler’s Mercedes division.
In a press release, Audi accepted the fine and said it would not lodge an appeal against it. It accepted its responsibility for the ‘deviations from regulatory requirements’.