Audi agrees to pay 800m-euro fine for emissions scandal

New York

AUDI, the luxury car division of Volkswagen, has agreed to pay a substantial fine in Germany for its role in an emissions-cheating scandal that has become a serious threat to the country's auto industry.

The fine of 800 million euros (S$1.3 billion), will resolve civil claims against the company, but does not affect a criminal investigation of Audi executives that resulted in the arrest of the former chief executive, prosecutors in Munich said.

Audi said in a statement that it "accepts the fine and, by doing so, admits its responsibility". The division, which accounts for a disproportionate share of Volkswagen's profit, also warned that the punishment would cause it to miss its financial targets for the year.

The penalty brings the scandal's cost to Volkswagen, from fines and lawsuits, to more than US$32 billion, a cash drain that hampers the company's ability to invest in new technologies such as autonomous vehicles. And there may be more financial fallout to come: Shareholders seeking 9 billion euros are suing the company in German courts.

The fine also puts another dent in the German car industry's reputation a day after the country's regulators formally accused Opel of using illegal software to conceal excess emissions by diesel vehicles. Opel, a former General Motors subsidiary, is now owned by PSA, the French maker of Peugeot and Citroen cars.

Since Volkswagen admitted in September 2015 that it had used engine software to dupe regulators in Europe and the United States, the scandal has widened to include almost all European carmakers. It is a particular threat to the German carmakers that dominate the luxury car business because of their reputation for engineering excellence, which has been called into question by the scandal.

The carmakers, including Daimler's Mercedes division, are accused of using various methods to ensure that diesel cars passed official emissions tests even though they emitted illegal quantities of nitrogen oxides in regular use. Nitrogen oxides are considered a cause of lung ailments such as asthma and cancer, and are the main cause of urban smog.

Opel denied violating regulations and said it would contest the accusations. It also denied accusations by German regulators that it had been slow to cooperate with their inquiry.

The fine imposed on Audi was for failure to properly supervise employees who devised and executed the emissions-cheating scheme. NYTIMES