VW gets initial backing from US court for diesel settlement

A US court has given its initial blessing to a plan for VW to pay $1.22bn (£0.98m) to fix or buy-back 80,000 cars from the emissions scandal.

Volkswagen could be forced to pay more than $4bn unless it gets regulatory clearance for the plan, which covers three-litre diesel engines.

The company, which has already agreed a deal covering 475,000 two-litre cars, will receive a final ruling in May.

The court also gave preliminary backing to a separate deal involving Bosch.

The German car parts supplier to Volkswagen had proposed a settlement of $327.5m to US diesel VW owners.

"This settlement marks an important milestone in Volkswagen's efforts to make things right in the United States," said Robert Giuffra, an attorney representing VW.

US District Judge Charles Breyer, in San Francisco, is due to hold a hearing on 11 May on whether to grant final approval for the VW and Bosch deals.

VW has now agreed to spend up to $25bn in the US to settle claims from car owners, environmental regulators, US states and dealers.

The US has also charged seven current and former VW executives with wrongdoing.

VW previously agreed to spend up to $10.03bn to buy back up to 475,000 polluting two-litre vehicles that are fitted with software that allowed them to evade emissions rules during testing.

The Federal Trade Commission said said earlier this month that US customers who bought the three-litre diesel cars would be fully compensated "through a combination of repairs, additional monetary compensation, and buybacks for certain models".

Owners of 2009 to 2012 models could get between $26,000 to $58,000 for a buyback, depending on the model, mileage, and trim of the car, the FTC said.