VW Recall Could Be Most Expensive Ever
The troubles for Volkswagen appear to be compounding every day. The company continues to issue press releases adding more and more vehicles to the recall list, just this week including several Porsche models sold in Europe. The company’s former reputation as a brand known for producing fuel-efficient and environmentally friendly vehicles was tarnished if not destroyed after it was revealed that the company used a software trick to cheat emissions tests. Experts in the auto industry say that VW will pay a high cost for its deception, with some estimating that the recall will qualify as the most expensive ever.
The first component of the recall cost will be the expenses associated with repairing millions of vehicles worldwide. It is difficult to understand what this might cost as the list of impacted automobiles continues to expand, but industry experts believe the total will run into the billions. Already, VW has told shareholders that it has put aside $8 billion to cover expenses, though many believe this will be a drop in the overall bucket.
Next up are the fines from environmental regulatory agencies, both in the U.S. and around the world. Estimates are that the EPA could fine VW as much as $37,500 for each impacted vehicle sold in the United States. Globally, the total cost could rise to $34 billion.
Another area where VW is expected to spend billions is in civil class action lawsuits, with consumers bringing claims for financial compensation. One aspect of such lawsuits involves the loss of resale value suffered by the hundreds of thousands of VW owners. Customers paid more for a VW diesel vehicle, a car long known for having “clean diesel” engines, and this additional value has since been lost after it was revealed the “clean” engines weren’t so clean after all. Experts believe VW owners will incur lost resale value as high as $5,000 per vehicle. Compensating for this loss in resale value could cost VW several billion more dollars.
Beyond the direct costs to VW and to consumers, other companies will suffer serious losses thanks to VW’s deceptive actions. Suppliers and other companies that provide parts and service to VW are likely to face steep cuts in orders as vehicle sales plunge, adding billions more in indirect costs. What is increasingly clear is that VW’s actions have created ripples that are spreading out across the automotive industry, meaning many millions of people will suffer because of the deception perpetrated by a few.
If you have a vehicle that is subject to the recall, please call Kobs & Philley for a free consultation. We have experience in pursuing claims such as that subject recall as we have been active in the BP litigation as well as other Mass Tort claims. Please let our friendly staff of attorneys help with your claim.
Source: “The VW scandal could cost car owners $5,000,” by Rocky Newman, published at Fortune.com.