Volkswagen brand chief confident of finding solution to U.S. diesel issues

Wed Jan 6, 2016 2:45pm EST
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(Reuters) - The head of Volkswagen AG's (VOWG_p.DE: Quote) top-selling brand said on Tuesday he is confident the German automaker will reach agreement with U.S regulators to bring nearly 500,000 diesel vehicles into compliance with U.S. emissions laws.

"We are confident we will find an acceptable solution," VW brand chief Herbert Diess said at a press conference at the Consumer Electronics Show in Las Vegas, Nevada.

In an interview with Reuters, Diess said fixing older VW cars equipped with 2.0-liter diesel engines will be more difficult than bringing more recent models into compliance.

"The intrusion into the car will be quite significant," Diess said of the older models. Some U.S. regulators and lawmakers have said VW may have to buy back older models. Diess did not say whether VW is discussing that, but said he is optimistic an agreement with U.S. regulators will be reached soon.

"It's a very constructive dialogue," he said.

The U.S. Environmental Protection Agency said Wednesday that "recall discussions with the company have not produced an acceptable way forward. EPA continues to insist that VW develops effective, appropriate remedies as expeditiously as possible."

The U.S. Justice Department on Monday sued Volkswagen for up to $48 billion for allegedly violating U.S. environmental laws.

Diesel technology will still play an important role in VW's future products, Diess said. "Diesel still has a future in some segments," including in sport utility vehicles, "and in some markets it will be a must," he said. Europe will still be a major diesel market in the next decade, Diess said.

Volkswagen has admitted it installed software in certain diesel models sold in the United States, that allowed the cars to pass government emissions tests, but then emit nearly 40 times the allowed levels of pollutants on the road.   Continued...

Herbert Diess, chairman of Volkswagen Passenger Cars' board, speaks during a keynote address at the 2016 CES trade show in Las Vegas, Nevada, January 5, 2016.  REUTERS/Steve Marcus