VW Fears Most of Its Cars on Cargo Ship ‘Felicity Ace’ Are Beyond Salvage

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Volkswagen AG has lost hope that many of its roughly 4,000 vehicles aboard a cargo ship that caught fire last week in the Atlantic can be saved.

The automaker’s brands and dealers have started notifying customers that the U.S.-bound vehicles will likely not be delivered, a spokesperson said Friday. “Individual solutions” are being worked out with customers, Volkswagen said.

Fire on Massive Car Transport Ship, Felicity Ace, Is Likely Extinguished

“We fear that the fire on the ship has damaged a large number” of the vehicles “to such an extent that they can no longer be delivered to customers,” according to the statement. Damage to the vehicles is covered by insurance, the company said.

Cars aboard the Felicity Ace, a cargo ship operated by Mitsui OSK Lines Ltd., were on their way to a port in Rhode Island from Germany’s Port of Emden when a fire broke out on Feb. 16 off the coast of Portugal’s Azores Islands. The blaze is believed to have lasted more than a week after the Panama-flagged ship’s crewmembers were evacuated and it was left adrift.

Risk-modeling company Russell Group estimated Monday there are $401 million worth of cars on board, and that roughly $155 million of that belongs to the German manufacturer. Anderson Economic Group, a Michigan-based consultant, said a $334.6 million cargo loss was possible.

The cause of the fire remains unclear. VW’s Golf compact cars and ID.4 electric crossovers were among the vehicles aboard the ship, according to an internal email last week from the automaker’s U.S. operation. Headquartered in Wolfsburg, Germany, the group manufactures cars under brands including VW, Porsche, Audi and Lamborghini — all of which were on the ship.

A salvage team successfully boarded the vessel on Friday via helicopter and accompanied the ship as it was towed by a large salvage ship to an area off the Azores, Mitsui OSK said on a website created to provide updates on the incident. Two tugs and a large salvage craft with additional firefighting capability escorted the vessel.

The ship appeared stable, with smoke no longer visible and no oil leaks observed, the company added.

Photograph: Rows of newly manufactured Volkswagen AG and Audi AG automobiles sit parked before shipping outside the VW factory at the port in Emden, Germany, on Friday, March 9, 2018. Photo credit: Krisztian Bocsi/Bloomberg.