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Volkswagen’s emissions scandal to cost $23 billion

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On Friday, Volkswagen announced it has set aside provisions of €16.2 billion (approx. $23.3 billion CAD) to cover the costs of the emissions scandal including technical modifications to engines and various customer-related measures.

Bloomberg reports that Volkswagen AG lost €4.1 billion ($5.9 billion CAD) in 2015. The automaker also expects a 5% drop in sales for 2016, not only due to many consumers having lost their trust in the brand, but also because of unfavourable economic conditions particularly in South America and Russia.

Furthermore, after considering all the circumstances, Volkswagen’s Board of Management and Supervisory Board will propose shareholders a dividend of only $0.16 CAD per ordinary share and $0.24 CAD per preferred share ― versus about $7 per share last year.

This comes a few days after the company’s top executives reportedly agreed to have their annual bonuses cut by at least 30%.