Plan Insurance Blog

Is Dieselgate Compensation The New PPI?

European Manufacturers Feeling the Heat For Their Role In The Dieselgate Scandal

French authorities have recently indicted Renault, Peugeot and Citroen for fitting alleged ‘defeat devices’ in their diesel vehicles, leading many to suggest that the dieselgate scandal is an industry-wide problem. The list of UK claims now extends to BMW, Fiat-Chrysler, Ford, Hyundai, Mercedes, Vauxhall, Volvo, and Porsche-Audi, as well as Renault, and Peugeot-Citroen.

Carlos Tavares, the CEO of newly formed motor trade giant Stellantis (owners of Peugeot and Citroen, Vauxhall and Fiat-Chrysler) believes that the car industry has been tarnished by the Volkswagen emissions scandal of 2015. Speaking to the Financial Times, he lamented: “I am put in a box, and the box says ‘we are crooks’”.

Tavares is seeking concessions from the British government over new investments in UK Vauxhall plants. He warned British officials that they must show a “willingness to protect some kind of auto industry” or Stellantis would arrive at the point where there was “an ethical responsibility of the officers of the company to make appropriate decisions”.

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His attention is now being drawn to a legal fight at home. It has long been suspected the Peugeot and Citroen diesel vehicles have been fitted with so-called defeat devices. In 2016, Peugeot and Citroen had their offices raided by anti-fraud investigators as part of the French government’s investigations into the growing emissions scandal.

One of France’s leading broadsheet, Le Monde, then obtained documents from the still-ongoing investigation revealing that their engines were purposefully designed to have two operating modes: a “LowNOx” mode that “lowers NOx emission but increases fuel consumption and reduces torque (acceleration)” and a “LowCO2” mode that “reduces fuel consumption, boosts torque but significantly increases NOx emissions”.

Earlier this month, Renault were indicted by a Paris Court accusing the company of “fraudulent strategies” to falsify emissions test results for up to 25 years. Renault was ordered to pay 20 million euros (£17.2 million) in bail and provide a bank guarantee of 60 million euros (£51.5m) to cover any compensation orders.

Later in the same week, both Peugeot and Citroen were given similar indictments. They have been ordered to provide €30m and €25m guarantees for potential pay-outs respectively. The potential liability for direct compensation payments to affected vehicle owners could be far more substantial. If any of our fleet, commercial vehicle, motor trade, taxi or private hire insurance clients are interested in learning more they can visit for further details.

The indictment means that the brands now merged under the new Stellantis corporation are now all facing official investigations across Europe, adding fuel to the argument that owners in the UK should receive compensation for being mis-sold fraudulent vehicles and prompting many to argue that the allegation of ‘crooks’ that Tavares laments, may not be so far off the mark after all.

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