Skip to main content

VW Borrows Heavily In Advance Of Emissions Investigations

As the fallout from VW's dieselgate scandal reverberate around the motor industry, VW has started the process of planning for the fallout in repairs, fines, compensations and falling sales. First step has been to secure a load of $21bn, to hedge against the cost of repairs to what is looking like more than 11m vehicles worldwide.
With bank confidence in the company badly shaken by the scandal, VW has had to put some of its assets up as collateral for the loan. Although which brands are on the table hasn't been publicly released, most are guessing that Bentley. Lamborghini, Ducatti and MAN Power could all be sold if additional funding became necessary.
Meanwhile in Europe VW is facing charges of tax evasion. Specifically that by misrepresenting the emissions of its vehicles customers were able to benefit from 'green' tax subsidies that they might not have been entitled to. With around 10m of the affected vehicles sold in Europe, Governments will presumably be looking at ways of clawing back extra tax euros, either directly from customers who benefitted, or via VW directly.
Wherever the money ends up coming from, there's likely to be some form of punitive fine to follow. Germany's hardline in the summer's bailout negotiations may come back to bite VW in the near future.