VW may buy back autos

Volkswagen could be preparing to buy back tens of thousands of U.S. cars with diesel engines.

Volkswagen may buy back tens of thousands of cars with diesel engines that can’t be easily fixed to comply with U.S. emissions standards as part of its efforts to satisfy regulators’ demands, two people familiar with the matter said.

Also Friday, the German automaker said its global sales fell 2% last year as it struggled with slowing economies in Russia and Brazil, as well as the scandal over rigging vehicles with software that turned off emissions controls when the cars were not being tested.

VW and the U.S. Environmental Protection Agency are negotiating the emissions issue, and no decisions have been reached. A buyback would be an extraordinary step that demonstrates the challenge of modifying the rigged vehicles.

Volkswagen has concluded that it would be cheaper to repurchase some of the more than 500,000 vehicles than fix them, said the people, who spoke on condition of anonymity because they were not authorized to discuss the matter publicly.

One person said about 50,000 cars might be bought back from their owners, a figure that could change as talks continue.

EPA Administrator Gina McCarthy said the automaker’s proposals to bring its cars into compliance with emissions standards have so far been inadequate.

McCarthy is scheduled to meet with VW Chief Executive Matthias Mueller in Washington on Wednesday, the day before the California Air Resources Board is to publicly respond to VW’s proposed repairs.

In 2015, VW’s sales dropped to 9.93 million vehicles from 10.14 million in 2014. The emissions scandal arose in late September, affecting only part of the year.

The figures announced Friday were for all of VW’s brands, including SEAT and Skoda and luxury makes Audi and Porsche. The Volkswagen flagship brand saw sales fall 4.8%.

Overall VW sales plunged 37% in Russia and 38% in Brazil as those economies slowed, accounting for much of the global drop. Weaker sales in China also hurt. U.S. deliveries climbed 1.2%.

The company has said 11 million cars worldwide have the cheating software. Mueller has said VW is working to change its culture to prevent future wrongdoing.

Katz, Rauwald and Plungis write for Bloomberg News/McClatchy. The Associated Press was used in compiling this report.