VW cops record $125m Dieselgate fine

A Federal Court judge has hit Volkswagen with a record $125 million fine over the Dieselgate scandal.

The order by Justice Foster is $50 million more than the $75 million fine agreed between the corporate watchdog ACCC and Volkswagen in October. VW will also be required to pay $4 million in court costs.

At the time of the earlier settlement Justice Foster had accused the ACCC of going soft on Volkswagen, telling the court he was "really outraged" by the settlement.

The court ordered penalty is more than 12 times the previous maximum fine for an automotive company in Australia. Ford was fined $10 million in 2018 for defective transmissions.


Justice Foster found the Volkswagen Group has misled consumers and the Australian Government when it submitted fuel economy and emissions figures for more than 100,000 diesel-powered vehicles.

The vehicles were found by the US Environmental Protection Agency (EPA) to contain a "defeat device" that could recognise whether a vehicle was being operated in a test laboratory or on the road.

As a result the vehicles emitted significantly higher levels of nitrogen oxides (NOx) when driven on the road than when tested in the laboratory.

In a statement released after the ruling, Volkswagen said it believed the original $75 million settlement with the ACCC was a fair amount.

More than 57,000 Volkswagens were caught up in the scandal. Picture: Supplied.
More than 57,000 Volkswagens were caught up in the scandal. Picture: Supplied.


The company said it was "carefully reviewing the Court's reasons for deviating from that amount".

"VWAG will determine in coming weeks whether it will appeal the decision of the Court," it said.

The case involved about 57,000 Volkswagen vehicles with diesel engines.

"Most of these have subsequently had an update to the engine control software under the ongoing voluntary recall. The relevant authorities have confirmed that this update satisfies European and Australian emission standards," it said.

Justice Foster imposed the penalty on the global Volkswagen AG group and dismissed the case against Volkswagen Australia and Volkswagen subsidiary Audi.

ACCC chairman Rod Sims said Volkswagen's conduct had been "blatant and deliberate" and it had made false representations to the Australian Government.

"If the affected Volkswagen vehicles had been tested while operating in the mode Australians were driving in, they would have exceeded the NOx emissions limits allowed in Australia.

"Volkswagen's conduct undermined the integrity and functioning of Australia's vehicle import regulations which are designed to protect consumers," Mr Sims said.

Earlier this year Volkswagen and Audi Australia reached a settlement in two class actions, agreeing to pay customers between $87 million and $127 million.

Globally, the group has paid out billions of dollars in fines, including a landmark penalty of 1 billion euros (about $A1.61 billion) in Germany in 2018.

More to come