Business

Audi fined £700m over diesel emissions scandal

Rupert Stadler Image copyright AFP
Image caption Former Audi boss Rupert Stadler was arrested in June over his alleged involvement in the emissions scandal

Audi has been fined €800m (£700m) to settle an investigation by German prosecutors into breaches of diesel emissions rules.

The premium car brand, owned by Volkswagen, said it "accepts the fine and ... admits its responsibility".

In June, VW agreed a €1bn settlement in Germany over the emissions scandal, which came to light in 2015.

Audi, whose ex-boss Rupert Stadler is being investigated over "dieselgate", said affected cars spanned 2004-18.

Audi said in a statement that some V6 and V8 diesel engines were "placed on the market with an impermissible software function". Other engines implicated include the widely-used EA 288 and EA 189.

In 2015, US investigators discovered that some VW diesel cars were fitted with what became known as "defeat devices" to flatter emissions readings during engine tests so that the true output of nitrogen oxides was reduced.

The scandal spread throughout the motor industry, engulfing not just VW and its other car brands, but to other motor manufacturers.

Image copyright Reuters

VW admitted in 2015 to putting defeat device software into 11 million cars worldwide. The company's total costs in fines, buybacks and refits has now reached €27bn.

While the probe against Audi is now closed, other cases against executives from the VW group - including former chief executive Martin Winterkorn - remain open, with charges including fraud, false advertising and failure to keep investors informed.

Earlier this month, VW ousted Audi chief executive Rupert Stadler. In June, he was put under investigation by German prosecutors over alleged fraud and false advertising involving the sale of cars with defeat devices, and remains in police custody.

Audi's fine of €800m consists of €5m for regulatory rule-breaking, with the rest being payment for the economic benefits resulting from the sale of cars with defeat devices.

Audi, VW group's most profitable brand, said the fine would hit its financial performance this year.

VW share price initially fell on the news, but later rose more than 2% in Frankfurt.


Analysis

By Theo Leggett, BBC international business correspondent

Just as its parent company did earlier this year, Audi has "accepted responsibility" for regulatory breaches. It's a reasonably large fine, but the chances are executives and shareholders will be quietly pleased as it removes one more avenue of legal jeopardy facing the VW Group.

Essentially, Audi has been sanctioned for failing to detect the "defeat device" software installed in its own vehicles and allowing them to go on sale.

That suggests the main area of wrongdoing - actually commissioning and devising the software to beat emissions tests - is seen as a matter for individuals, rather than the company itself.

The affair isn't over. Volkswagen Group is still fighting a major lawsuit brought by investors who believe they were kept in the dark about the developing crisis at the company, and lost money as a result.

There are also group actions brought by aggrieved car buyers around Europe - including in the UK.

And Audi's former chief executive Rupert Stadler is languishing in jail, awaiting trial over his alleged involvement in the scandal.


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