Volkswagen vows to fix Dieselgate and launch new electric vehicles while facing increasing risks that it may have to sell assets to pay for the emissions scandal, the company said at its annual media and investor conference on April 28.
Last year, the company set aside €16.2 billion to settle the costs of the emissions scandal. Now it’s afraid that’s not enough as it’s facing more significant financial liabilities.
“The funding needed to cover the risks may lead to assets having to be sold due to the situation and equivalent proceeds for them not being achieved as a result,” said the risks and opportunities report the company published.
The Dieselgate leads the company to a net loss of $1.55 billion in 2015, the largest in its history and the first on an annual basis in 1993.
But taking out the scandal, and 2015 was a good year for Volkswagen in terms of sales. It sold nearly 10 million cars across all of its brands, and its revenue increased €10.8 billion to €213.3 billion.
Though fixing the affected diesel cars will remain a priority, Volkswagen aims to take a piece of the electric vehicle pie by launching 20 new models by 2020. The company also plans to found a legally independent company in mobility services, meaning ride-sharing apps and car-sharing.
The company also underlines the importance of the Chinese market in its growth and it plans to release several new models in the country. It will spend more effort to assess the needs of the market to devise the best strategy and offer the best products that cater to China.
Good news and a brighter outlook for the future notwithstanding, the company failed to avoid criticism from investors and unions when it revealed in the annual report the compensation for the former chief executive. Martin Winterkorn, who resigned last year when the company faced pressure from the emissions scandal, received total compensation of €7.3 million in 2015.
To make good the news, the company’s management decided to withhold part of their 2015 bonus payments, and will award them in 2019 if they meet certain performance criteria, including a 25% increase in share price in relation to the average share price in the 30 days before April 22, 2016.
18% of CEO Matthias Müller’s compensation is being withheld for several years following the emissions scandal.
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