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  • Volkswagen Could Sell Off Assets to Pay for Costs of Emissions Scandal

Volkswagen Could Sell Off Assets to Pay for Costs of Emissions Scandal

Company Could Blow Through Original Cost Estimates

Apr 28, 2016
Volkswagen has said it may have to sell off some of its assets to pay for its diesel emissions scandal. The company originally earmarked more than $18 billion to cover the costs associated with its TDI “Clean Diesel” engines’ defeat devices, but it may need more than that.
Photo 2/4   |   2011 Volkswagen Jetta TDI Front Three Quarter1
According to Reuters, uncertainty about the scandal’s legal risks and criminal proceedings may mean that more costs could emerge. Among those risks include decreased demand for VW’s existing cars and civil actions taken by VW owners and others.
So, what assets might the company lose if necessary? Volkswagen AG includes Audi, Porsche, Bentley, Lamborghini, Bugatti, and those companies’ associated assets, as well as Europe-only brands Skoda and Seat. However, each of those subsidiaries are profitable (or close to profitable), and they each represent an important part of Volkswagen’s global presence.
Photo 3/4   |   2015 Volkswagen Golf TDI Engine1
VW also has a significant stake in semi manufacturers MAN and Scania AB, as well as full ownership over defunct marques Horch, NSU, and Auto Union. It also owns Ducati in full, under the Lamborghini umbrella. There’s a slightly greater chance the company will try and sell off at least portions of those companies, as their identities aren’t central to VW’s mission. Volkswagen also owns myriad manufacturing facilities, corporate offices, and other related assets, which could face the chopping block.
With an estimated worldwide cost billions more than that original number, Volkswagen could find itself in major pain if it doesn’t liquidate some of its assets. Speculators have postulated the company might actually go under or withdraw from certain markets (including the U.S.) thanks to the diesel scandal.
Follow the rules, kids. That’s the lesson here.
Source: Reuters
Photo 4/4   |   2012 Volkswagen Passat Chattanooga Solar Array

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