Embattled Carmaker Volkswagen reaches deal to compensate US dealerships

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The embattled carmaker has reached an 'agreement in principle' to compensate its 650 US dealers which sued Volkswagen for damages in connection with its emissions-cheating scandal.

The automaker and a lawyer for Volkswagen (VW) brand dealers announced a tentative settlement at a court hearing in San Francisco on Thursday, refusing, however, to disclose the amount of damages to be paid by the German carmaker.

Even though not all the details of how the settlement fund would be divided among the dealers, the two sides were planning to file details of the agreement by the end of September, they told US district judge Charles Breyer.

Ever since the carmaker's emissions-cheating scandal broke in September last year, VW's US dealers have been barred from selling polluting diesel vehicles. At the time, VW admitted that more than 600,000 of its diesel cars sold in the US were equipped with defeat devices deactivating pollution controls. A little later, the company said it had installed about 11 million of its diesel vehicles worldwide with the improper software.