Volkswagen AG (OTCMKTS:VLKAY) believes they will not be able to reach an agreement with US authorities over the emission scandal by March, reports Reuters. German business publication Manager Magazine says negotiations are not going as fast as hoped. The US Environment Protection Agency is reportedly demanding tests first be carried out on the tabled solution before any deal is struck.
US Regulatory Hurdles
The agency reportedly wants tests to be carried out on long distance drives before issuing approval. Such sentiments could derail the negotiations process which has until now failed to bear any fruit.
A suitable fix for affected cars in the US is not the only problem Volkswagen has to grapple with even as talks drag on. The automaker is on course to incur billions of dollars in fines and costs of lawsuits over its involvement in the use of a cheating device.
European Recall on Track
Amidst hurdles in the US, Volkswagen says its European recall is on track. The automaker says it has already fixed 4,300 affected cars in Germany, a tiny percentage of about 2.4 million on the waiting list. Europe will account for the highest number of recalls as there are about 8.5 million affected cars. US recalls on the other hand could target 600,000 cars.
Recalls began last month, first targeting the Amarok model in Germany. Recalls for Passat Sedan and Station Wagon are set to begin in March. The scandal-hit automaker is planning to use the German recall as a blueprint for recalls across the region.
Volkswagen has already acknowledged that the amount of money needs to fix affected cars could be much higher than initially thought.
While Europe’s car industry is in top gear, Volkswagen cannot benefit as much as it would like to as it continues to grapple with the emission scandal. In January, it was the only automaker to record a drop in sales in the region as other automakers recorded impressive sales. It thus promises to be a bumpy road ahead even as it tries to ink a deal with regulators in the US.