Volkswagen Told To Do More For Its European Customers

October 24, 2016, 4:28 PM UTC
IAA truck show in Hanover
The logo of German car maker Volkswagen is seen at the IAA truck show in Hanover, September 22, 2016. REUTERS/Fabian Bimmer - RTSP5UA
Fabian Bimmer—Reuters

European Union consumer champion Vera Jourova has sought to ramp up pressure on Volkswagen to compensate owners of diesel vehicles rigged to cheat pollution controls and asked it for guarantees that its technical fix will work.

Jourova, the EU’s commissioner for consumer affairs, has written to VW official Francisco Javier Garcia Sanz asking for proof that the carmaker can fulfill a pledge to make vehicles comply with limits on nitrogen oxide (NOx) fumes by autumn 2017, a Commission official told Reuters on Monday.

“We need VW to guarantee, in a legally binding way and without any time limit, that the repairs will work and do not have any negative impact,” the official said.

The letter is in response to plans presented by Garcia Sanz last month to address harm caused to VW’s European clients with a fix the company says will bring vehicles in line with EU law.

Volkswagen (VLKAY) admitted to U.S. regulators last year that it installed illicit software on more than 11 million diesel vehicles sold worldwide.

Read More: Inside Volkswagen’s Emissions Scandal

The majority of the affected vehicles are in Europe and Jourova’s letter shows the growing frustration among EU officials over the gap in VW’s approach to European customers while offering cash payouts to U.S. owners of its cars.

VW has so far set aside about $18 billion to cover the cost of vehicle refits and a settlement with U.S. authorities. It also faces damages claims from investors over its disclosure of the emissions cheating.

Jourova’s letter called on the German carmaker to offer to repurchase some vehicles, the official said.

Patchwork Regulation

The commissioner said that VW could be in breach EU consumer law and repeated calls for voluntary compensation because European consumers are stymied by their inability to file United States-style class-action lawsuits in many EU nations and by weaker EU rules on defeat devices.

Her letter to VW said that the company had an obligation to ensure its diesel fix does not leave consumers out of pocket in terms of fuel efficiency and engine life.

VW, which has has previously rejected suggestions it may have breached EU consumer rules, says it is meeting legal requirements and that customers will receive certification to show their vehicles conform with emissions requirements.

The company said on Monday that it has provided Jourova with assurance that it would intensify dialog with consumers if the need arises.

Jourova, who sources said is due to meet again with Garcia on Thursday, has urged consumer groups to organize lawsuits based on allegations that VW duped consumers by promoting their cars as environmentally friendly.

While the EU has little leverage in the domain of consumer law, the EU’s Industry Commissioner has threatened legal action against EU nations if they fail to enforce EU laws on air quality.