..."/>VW Group Might Sell Assets |

Automotive

Published on May 1st, 2016 | by Daniel Sherman Fernandez

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VW Group Might Sell Assets

VW-highway

Volkswagen Group has just made a statement that if the costs of diesel gate increases it could mean “assets having to be sold.” In other words, while the automaker estimates the scandal will end up costing it about 16 billion euros (about 7 billion euros related to legal cases), in truth, it doesn’t know for sure what the final bill could be.

For example, some investors are suing VW in Germany and elsewhere for not telling them in a timely fashion about its malfeasance. Shareholders only found out a couple of weeks after VW came clean to the EPA, when the agency filed a violation notice and the stock tumbled.

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VW says “it duly complied with its capital market obligations” and has therefore not made provisions for these cases. Of course it’s odd that investors are suing their own company for compensation that would be paid from VW cash flows, thereby hurting these same investors. Still, management’s dithering and shortsightedness last September doesn’t encourage full confidence in its chances in all the cases lined up against it.

Goodyear 650x85(DSF)

Ultimately, VW didn’t understand the costs of the scandal then and still can’t guarantee the estimate now. The shares have crept up again this month as investors try to sniff out the right time to buy back in. Ultimately, this is all still a brave call and we will watch and see how the drama unfolds completely and ends.

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