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Scandal Halts VW’s Diesel Passat Production In U.S.

New 2012 VW Passat First Drive And Factory TourNew 2012 VW Passat First Drive And Factory Tour
Line inspection workers check out a Volkswagen AG 2012 Passat at the company's factory in Chattanooga, Tennessee, U.S. Photograph by Mark Elias — Bloomberg via Getty Images

German automaker Volkswagen AG (VLKAY) has stopped production of the diesel version of its Passat sedans at its only U.S. plant in Chattanooga, as it scrambles to address the scandal over its doctoring of emissions data.

According to The Chattanooga Times Free Press, the company had continued to produce the cars after the scandal first broke in September, even though it had stopped selling them while it worked on a fix for the vehicles. Diesels accounted for just under 30% of total Passat sales in the U.S. before September, it said.

It isn’t clear whether the Passats fit into the category of cars that just need a software fix, or whether they will require a more expensive adjustment to their exhaust systems.

VW had bet heavily on a ‘refresh’ of the Passat to bolster its fortunes in the U.S., where it has struggled to make an impact against local and Japanese competition. Even after the first news of the scandal, they continued to perform well, rising 25% on the year in October, according to The Chattanooga Times.

However, the pressure on the company has been visible in its decision to offer customers cash gifts of up to $1,000 to keep their loyalty.