Audi, Admitting to Role in Diesel-Cheating Scheme, Agrees to Pay Major Fine

Audi, the luxury car division of Volkswagen, has agreed to pay a substantial fine in Germany for its role in an emissions-cheating scandal that has become a serious threat to the country’s auto industry.

The fine of 800 million euros, or about $930 million, will resolve civil claims against the company, but it does not affect a criminal investigation of Audi executives that resulted in the arrest of the former chief executive, prosecutors in Munich said.

Audi said in a statement that it “accepts the fine and, by doing so, admits its responsibility.” The division, which accounts for a disproportionate share of Volkswagen’s profit, also warned that the punishment would cause it to miss its financial targets for the year.

The penalty brings the scandal’s cost to Volkswagen, from fines and lawsuits, to more than $32 billion, a cash drain that hampers the company’s ability to invest in new technologies like autonomous vehicles. And there may be more financial fallout to come: Shareholders seeking 9 billion euros are suing the company in German courts.

The fine also puts another dent in the German car industry’s reputation a day after the country’s regulators formally accused Opel of using illegal software to conceal excess emissions by diesel vehicles. Opel, a former General Motors subsidiary, is now owned by PSA, the French maker of Peugeot and Citroën cars.

Since Volkswagen admitted in September 2015 that it had used engine software to dupe regulators in Europe and the United States, the scandal has widened to include almost all European carmakers. It is a particular threat to the German carmakers that dominate the luxury car business because of their reputation for engineering excellence, which has been called into question by the scandal.

The carmakers, including Daimler’s Mercedes division, are accused of using various methods to ensure that diesel cars passed official emissions tests even though they emitted illegal quantities of nitrogen oxides in regular use. Nitrogen oxides are considered a cause of lung ailments like asthma and cancer, and are the main cause of urban smog.

Opel denied violating regulations and said it would contest the accusations. It also denied accusations by German regulators that it had been slow to cooperate with their inquiry.

The fine imposed on Audi was for failure to properly supervise employees who devised and executed the emissions-cheating scheme. Prosecutors in Munich continue to investigate alleged wrongdoing by Audi executives, including Rupert Stadler, who was the company’s chief executive when he was arrested in June.

Despite being held in pretrial detention, Stadler continued to hold the chief executive title until he was relieved of his post this month.

Munich prosecutors said that the fine stemmed from conduct that began in 2004 and led to illegal software being installed in nearly 5 million cars. The emissions-cheating software was present in V-6 and V-8 motors built by Audi and also used in Volkswagen and Porsche models. In addition, Audi sold cars equipped with motors using a Volkswagen design that also had illegal software, the prosecutors said.