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Volkswagen (VWAGY), Stellantis (STLA) to Pay Hefty Settlement Fees
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Volkswagen AG (VWAGY - Free Report) recently stated that it will pay £193 million ($242 million) to settle 91,000 out-of-court legal claims in England and Wales over the Dieselgate emissions scandal that the largest European carmaker was embroiled in.
The scandal ensued in 2015 after around 11 million company cars worldwide and 1.2 million in Britain were alleged to have been fitted with software that hoodwinked diesel emission tests designed to limit nitrogen oxide car fumes. It has gone down as one of the costliest corporate scandals in history. Volkswagen has spent more than €30bn (£26bn) in legal fees and payouts to customers, including a $15bn (£12bn) settlement in the United States.
Per the settlement, the claimants will receive average payments of more than £2,100 each after joining the lawsuit that claimed that Volkswagen’s Audi, Seat and Skoda’s emissions, too, were more than what the company stated. The carmaker will also pay out an amount estimated to be tens of millions of pounds to cover the claimants’ legal costs and other fees that include the costs levied by investors who backed the legal actions.
Volkswagen did not admit to any wrongdoing and has opined that a settlement, rather than an expensive six-month trial and possible appeals, is a more judicious decision. It, however, has sent out an apology to customers in England and Wales.
Volkswagen has already shelled out billions in settlements worldwide regarding the scandal. The matter has been long-drawn in England and Wales because of a different legal framework that does not allow for the less stringent U.S.-style actions.
A number of other carmakers also face litigation for similar claims in the U.K., one such being Stellantis NV (STLA - Free Report) .
Stellantis has agreed to plead guilty to end a multi-year investigation probing its involvement in concealing the amount of pollution created by its diesel engines. Per media sources, the company is gearing itself up to pay $300 million to settle allegations of criminal fraud. Stellantis declined to comment on the report. The plea deal follows the revelation of Volkswagen’s Dieselgate scandal.
This will settle a long-standing probe by the U.S. Justice Department and the Securities and Exchange Commission around 2019 when Stellantis recalled nearly 1 million vehicles in the United States and Canada for not meeting federal tailpipe emission standards. As of last year, the agency has passed criminal charges for three employees. The probe involved nearly 100,000 Ram pickup trucks and Jeep SUVs sold in the United States.
It is time for the two biggies to take responsibility for their actions and put in efforts to rebuild trust.
Zacks Rank & Other Key Picks
VWAGY and STLA each currently carry a Zacks Rank #2 (Buy).
BRP Group has an expected earnings growth rate of 9.2% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.2% upward in the past 60 days. BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters.
DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 14.4% over the past year.
LCI Industries has an expected earnings growth rate of 67.5% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 32.2% upward in the past 60 days.
LCI Industries’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. LCII pulled off a trailing four-quarter earnings surprise of 21.8%, on average. The stock has lost 22.5% over the past year.
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Volkswagen (VWAGY), Stellantis (STLA) to Pay Hefty Settlement Fees
Volkswagen AG (VWAGY - Free Report) recently stated that it will pay £193 million ($242 million) to settle 91,000 out-of-court legal claims in England and Wales over the Dieselgate emissions scandal that the largest European carmaker was embroiled in.
The scandal ensued in 2015 after around 11 million company cars worldwide and 1.2 million in Britain were alleged to have been fitted with software that hoodwinked diesel emission tests designed to limit nitrogen oxide car fumes. It has gone down as one of the costliest corporate scandals in history. Volkswagen has spent more than €30bn (£26bn) in legal fees and payouts to customers, including a $15bn (£12bn) settlement in the United States.
Per the settlement, the claimants will receive average payments of more than £2,100 each after joining the lawsuit that claimed that Volkswagen’s Audi, Seat and Skoda’s emissions, too, were more than what the company stated. The carmaker will also pay out an amount estimated to be tens of millions of pounds to cover the claimants’ legal costs and other fees that include the costs levied by investors who backed the legal actions.
Volkswagen did not admit to any wrongdoing and has opined that a settlement, rather than an expensive six-month trial and possible appeals, is a more judicious decision. It, however, has sent out an apology to customers in England and Wales.
Volkswagen has already shelled out billions in settlements worldwide regarding the scandal. The matter has been long-drawn in England and Wales because of a different legal framework that does not allow for the less stringent U.S.-style actions.
A number of other carmakers also face litigation for similar claims in the U.K., one such being Stellantis NV (STLA - Free Report) .
Stellantis has agreed to plead guilty to end a multi-year investigation probing its involvement in concealing the amount of pollution created by its diesel engines. Per media sources, the company is gearing itself up to pay $300 million to settle allegations of criminal fraud. Stellantis declined to comment on the report. The plea deal follows the revelation of Volkswagen’s Dieselgate scandal.
This will settle a long-standing probe by the U.S. Justice Department and the Securities and Exchange Commission around 2019 when Stellantis recalled nearly 1 million vehicles in the United States and Canada for not meeting federal tailpipe emission standards. As of last year, the agency has passed criminal charges for three employees. The probe involved nearly 100,000 Ram pickup trucks and Jeep SUVs sold in the United States.
It is time for the two biggies to take responsibility for their actions and put in efforts to rebuild trust.
Zacks Rank & Other Key Picks
VWAGY and STLA each currently carry a Zacks Rank #2 (Buy).
Other top-ranked players in the auto space include BRP Group, Inc. (DOOO - Free Report) and LCI Industries (LCII - Free Report) , each carrying a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
BRP Group has an expected earnings growth rate of 9.2% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.2% upward in the past 60 days. BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters.
DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 14.4% over the past year.
LCI Industries has an expected earnings growth rate of 67.5% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 32.2% upward in the past 60 days.
LCI Industries’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. LCII pulled off a trailing four-quarter earnings surprise of 21.8%, on average. The stock has lost 22.5% over the past year.