Volkswagen announced the end of its diesel vehicle sales in the United States. Herbert Diess, brand chief of the company, says that it will instead concentrate on producing sports utility and electric vehicles in the country.
The decision to cease diesel vehicle sales results from VW suffering from a multi-million lawsuit. The auto giant hit the international spotlight with a scandal, which revealed that it has been cheating the emission tests of its diesel vehicles. In the span of just over a year, 11 million vehicles have already been involved with the said scandal.
Volkswagen takes a major gut punch with this move, because a quarter of its total sales in the US comes from its diesel vehicles. After judge ruling, the German car maker agreed to compensate customers for legal fines amounting to billions of dollars.
Daily Mail Online reports that in the European markets, the car manufacturer will continue its diesel car sales. The Mayor of London, Sadiq Khan, recently asked the auto company to pay back residents who were affected by the scandal. The Congestion Charges sum up to an estimated £2.5 million. Dealing with the scandal alone costed VW £4.7 billion.
Furthermore, Khan said that he wants to "see a proper commitment from them to fully compensate the thousands of Londoners who bought VW cars in good faith, but whose diesel engines are now contributing to London's killer air."
Volkswagen plans to recover from this pitfall by shifting its focus on its SUV and electric vehicle production in the US. Last week, VW exhibited the Atlas SUV at the Los Angeles Auto Show, which is designed especially for the American market. This is part of Diess' e-mobility campaign to revive the brand in the country.
The Hamilton Spectator also reports that the brand aims to have a roster of 19 SUVs by 2020 and to sell 1 million electric vehicles by 2025.
To achieve this goal, VW has announced its new labor deal, cutting 30,000 jobs through attrition.