Australia fines Volkswagen record Dh316m over ‘dieselgate’

Four years on from the emissions scandal that rocked the industry, the German car maker is still paying the price around the world

Volkswagen and Nissan are planning new car manufacturing plants in Ghana. AFP

Australia’s federal court fined Volkswagen a record A$125 million (Dh316m) for allegedly making false representations about compliance with the country's diesel emission standards, the country’s competition regulator said Friday.

The penalty amount is the highest ever ordered by the court for violating the Australian Consumer Law, the Australian Competition and Consumer Commission (ACCC) said in a statement on Friday.

The fine is one of many reverberations of the so-called "dieselgate scandal". Volkswagen was found using prohibited software in US pollution tests in 2015, triggering a global backlash against diesel vehicles that has so far cost it billions of dollars in fines, penalties and buyback costs.

ACCC said the German car maker admitted that it switched to two different software modes for testing and driving conditions, thereby not disclosing the original level of nitrogen oxide emissions.

The breach of law occurred when the car giant sought approval to supply and import more than 57,000 vehicles into Australia between 2011 and 2015.

"Volkswagen's conduct was blatant and deliberate," ACCC Chair Rod Sims said. "This penalty reflects a trend of ever higher penalties for breaches of Australian consumer law."

Volkswagen did not immediately respond to a request for comment from Reuters.

Eleven million cars were recalled worldwide after the "dieselgate" scandal broke in September 2015. In April 2017, an American district court judge imposed a $2.8 billion (Dh10.3bn) penalty on Volkswagen.

Pending cases internationally include a mass lawsuit in Germany, brought by the Federation of German Consumer Organisations on behalf of some 470,000 consumers. A decision for the case, which opened in September, may take several years.

Separately, the Australian Securities and Investments Commission (ASIC) said it started civil penalty proceedings in a federal court against Volkswagen Financial Services Australia for allegedly not making appropriate checks before giving out 49,380 loans to consumers.

ASIC alleges that the unit, which operates nationally to provide borrowers with consumer loans to purchase new and used cars, did not make required inquiries into borrowers' living expenses or if the loans were unsuitable for them.

These instances of alleged breaches in lending laws occurred between December 2013 and December 2016, ASIC said. The maximum penalty for one contravention is around A$1.7m to A$1.8m.

A spokeswoman for the unit said it takes its compliance obligations seriously and that it was co-operating with ASIC.