Bob Lutz: Volkswagen trying to bribe customers

Is Volkswagen doing enough?
Is Volkswagen doing enough?

Volkswagen is trying to keep as many cars out on the road as possible by essentially bribing customers into fixing their faulty diesel vehicles, said Bob Lutz, a Via Motors board member and former vice chairman of General Motors.

"Left to their own, the owners don't see any reason to get these fixes; they don't care about the environment, they enjoy the performance and fuel economy of the diesel," Lutz told CNBC's "Power Lunch" on Friday.

On Wednesday, German newspaper Die Welt reported VW had reached a deal with U.S. authorities to settle the case over its cheating of diesel emissions tests that would involve it paying each affected customer $5,000.

"Basically, it's a bribe to get people to accept diesel fixes," Lutz said. "After they've installed new software, those cars are going to be greatly diminished in their performance. I think a lot of people are going to say 'no, no, I'll just keep the car the way I have it.'"

An activist holds up a sign reading 'Stop Lying' (Schluss mit Luegen) during a protest of environmental watchdog Greenpeace in front of the headquarters of German car maker Volkswagen in Wolfsburg, central Germany, on September 25, 2015.
What you need to know about the Volkswagen scandal

Volkswagen's U.S.-listed shares have rebounded nicely since the scandal broke in September and have risen more than 20 percent since then.

VW US-listed shares in the last year

However, the company reported sharp losses for 2015, citing the emissions scandal as a key reason.

The net loss for last year stood at $1.77 billion. The firm said the cost of provisions to cover the emissions scandal had risen to $18.14 billion from a previous estimate of $7.5 billion.

It expected 2016 sales revenue for the Volkswagen Group to be down by as much as 5 percent year over year.

— CNBC's Antonia Matthews and Reuters contributed to this report.