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Volkswagen seeking over €100M in damages from former supplier Prevent

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Volkswagen seeking over €100M in damages from former supplier Prevent

Volkswagen AG is seeking more than €100 million in damages from its former components supplier Prevent USA Corp. amid an ongoing legal dispute between the two, Reuters reported Jan. 7, citing a company statement.

Prevent sued the German carmaker in a district court in Michigan on Nov. 18, 2019, accusing the company of "anti-competitive and tortious tactics" in order to "maintain its stranglehold" over car parts suppliers and to stop Prevent from acquiring smaller rivals.

In its complaint, Prevent said the suppliers that it acquired faced increased financial difficulty from Volkswagen's "relentless cost pressure" that caused some of the suppliers to fall into the brink of insolvency.

Volkswagen has since denied the allegations, describing them as "completely unfounded." At the time, the company said it will "vigorously contest" the claims.

Most recently, Reuters said Volkswagen has now filed a first claim for its Skoda Auto AS unit with the Brunswick regional court in Germany. The Dresden higher regional court will now have to decide on which courts are responsible for further damage claims, Volkswagen reportedly said.

Prevent said it did not have a copy of the suit and declined to comment further, the news outlet said.

In an email to S&P Global Market Intelligence, a Volkswagen spokesperson said the company will continue to defend itself against illegal forced situations.

"The delivery stops in August 2016 by ES Guss and Car Trim were illegal and unlawful — this has now been confirmed by various first and second instance judgments. Volkswagen is obliged to claim the damage caused to us unlawfully. The lawsuits are not only directed against the suppliers with whom the supply contracts existed, but also expressly against their parent companies of the Prevent Group, who are responsible for the delivery stops due to corresponding illegal instructions," the spokesperson said.