Volkswagen strikes deal with US authorities?

FRANKFURT (AFP) - 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, 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 euros) 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 United States 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 percent to an intraday high of 130 euros on the Frankfurt stock market on Thursday, after they already jumped by more than six percent the day before.

In early afternoon, the shares were showing a gain of 5.6 percent 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 $10 billion" to resolve civil claims by the US government and lawsuits by US car owners.