VW reaches $1.2 billion resolution over Audi, Porsche diesels

Volkswagen AG agreed to pay $1.2 billion to resolve United States consumer claims over rigged large diesel engines, the latest step in working through a pile of legal challenges resulting from its emissions-cheating scandal.

The proposed settlement, with the Federal Trade Commission and drivers of about 78,000 diesel models with 3.0-liter engines, brings the total cost of penalties, buybacks and fixes in North America to more than $23 billion as Volkswagen tries to overcome the biggest scandal in modern automotive history.

The deal covers VW Touaregs, several Audi models and Porsche Cayennes, according to filings in San Francisco federal court.