Embattled German auto giant Volkswagen looks to have struck a deal with US authorities over compensation for car owners in its massive engine-rigging scandal, according to a newspaper report yesterday, sending VW shares soaring on the Frankfurt Stock Exchange. 
The German daily Die Welt reported that VW had agreed to pay $5,000 (€4,400) to each owner in the US of a car fitted with the suspect software that skews the emissions of its diesel engine. 
On top of this, VW would foot the bill for re-fitting each engine, the newspaper said. 
Some 600,000 vehicles in the US are involved. 
According to other media reports, VW might even repurchase the affected cars from their owners. 
The speculation sent VW’s shares soaring 7.5% to an intraday high of €130 on the Frankfurt stock market yesterday, after they already jumped by more than 6% the day before. 
In early afternoon, the shares were showing a gain of 5.6% in a slightly softer overall market. 
Neither VW nor the US Justice Department or the environmental agency EPA were willing to comment on the report. 
But a judge in San Francisco had given both sides until midnight on Thursday to reach an agreement, otherwise it would have gone to trial. 
Die Welt said that a detailed plan for refitting the engines of the vehicles affected in the US had not yet been drawn up. 
And the full details of the compensation and fines facing the German group had not yet been worked out. 
“It’s more a broad framework defining the key points which will be worked out and finalised in the coming months,” the newspaper quoted an informed source as saying. 
Bloomberg Business News reported that VW had agreed to set aside “at least $10bn” to resolve civil claims by the US government and lawsuits by US car owners. 
VW is battling to emerge from its deepest-ever crisis into which it was plunged last September when it came to light that the carmaker had installed emissions-cheating software into 11mn diesel engines worldwide. 
The crisis led to the departure of chief executive Martin Winterkorn and caused VW to delay releasing its 2015 earnings due to uncertainty over the costs of the scandal, which are expected to run into many billions of euros. 
It has already set aside €6bn in provisions, but the final sum is expected to be much higher. 
The German giant, which has abandoned its ambitions of becoming the world’s biggest carmaker ahead of Toyota in the wake of the scandal, has already started recalling some 8mn vehicles affected in Europe. 
The scandal has greatly tarnished the reputation of a company once regarded as a paragon of German industry, even if group unit sales already seem to have stabilised. 
The recall operation in Europe is expected to take all year. And while VW is footing the bill, it is not expecting to have to pay European owners compensation, much to the chagrin of consumer protection groups. 
It was the US Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) that originally broke the scandal. 
And negotiations with the US authorities have proven much tougher than in Europe. 
VW’s supervisory board is scheduled to meet on Friday to approve the carmaker’s 2015 accounts, the publication of which has been delayed as the group struggles to tot up the cost of the so-called “Dieselgate” affair.  Another bone of contention in Germany recently has been the question whether VW’s top executives should be entitled to their normally very generous annual bonuses in the wake of the scandal. 
Meanwhile, Volkswagen and US officials have reached a framework deal under which the automaker would offer to buy back almost 500,000 diesel cars that used sophisticated software to evade US emission rules, two people briefed on the matter said on
Wednesday. 
The German automaker is expected to tell a federal judge in San Francisco that it has agreed to offer to buy back up to 500,000 2.0-liter diesel vehicles sold in the US that exceeded legally allowable emission levels, the people said. That would include versions of the Jetta sedan, the Golf compact and the Audi A3 sold since 2009. The buyback offer does not apply to the bigger, 80,000 3.0-liter diesel vehicles also found to have exceeded US pollution limits, including Audi and Porsche SUV models, the people said. 
US-listed shares of Volkswagen rose nearly 6% to $30.95 following the news. 
VW in September admitted cheating on emissions tests for 11mn vehicles worldwide since 2009, damaging the automaker’s global image. 
As part of the settlement with US authorities including the Environmental Protection Agency, Volkswagen has also agreed to a compensation fund for owners, a third person briefed on the terms said.