VW faces $48bn in fines in US
Germany’s leading automaker Volkswagen - that has hit a controversy over an emission control mechanism scandal for four months now – could face up to $48 billion for allegedly violating environmental laws by the US Justice Department.
Reuters reported that the US Justice Department has accordingly filed a lawsuit to the same effect against Volkswagen.
The news agency said such US lawsuits are typically settled at a fraction of the theoretical maximum penalty. Nevertheless, it quoted analysts as saying that the size of the claim meant that the company could face a larger bill than previously anticipated.
In September, US regulators initially said Europe's biggest carmaker could face fines in excess of $18 billion.
The Justice Department lawsuit is being filed in the Eastern District of Michigan and then transferred to northern California, where class-action lawsuits against Volkswagen are pending.
News on this showed immediate effects on the company’s shares which fell as much as 6 percent to a six-week low in early Tuesday trade. The drop has been described as the biggest on Germany's blue-chip DAX index.
The civil lawsuit, announced on Monday, reflects the growing number of allegations against Volkswagen since the German company admitted in September to installing devices to cheat emissions tests in several 2.0 liter diesel vehicle models, Reuters added.
The group, previously regarded as a paragon of German industry, revealed in late September that 11 million of its diesel cars worldwide were equipped with devices that can cheat pollution tests. The revelation rapidly snowballed into a scandal, which wiped a third off the company's market capitalization in just two days.
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