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VW To Settle With Hundreds of U.S. Dealers Over Diesel Losses

Volkswagen settlement in the USAVolkswagen settlement in the USA
A Volkswagen car is seen in Boston, 29 June 2016. Photograph by Adam Glanzman —picture-alliance/dpa/AP Image

Volkswagen AG (VLKPF) is expected to announce on Thursday it has reached a deal in principle to compensate its 650 U.S. dealers in connection with the German automaker’s diesel emissions scandal, a source briefed on the matter told Reuters.

The automaker and lawyers for the VW brand dealers are expected to announce a tentative settlement at a court hearing in San Francisco later Thursday morning. The amount of the settlement fund is not expected to be immediately disclosed, the source said. VW’s U.S. dealers have been barred from selling polluting diesel vehicles for nearly a year. According to a Wall Street Journal report, dealers were still sitting on 12,000 such vehicles in July.

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But the scandal has had an impact on dealers far beyond the models it affected. VW group sales in the U.S. were down 13.6% year on year in the seven months through July, a decline of over 28,000 vehicles.

While most dealers had gritted their teeth in anticipation of compensation, some had already broken ranks with the company and filed suit as early as April.