VW Aust checking cars with head office

The scandal has already spread beyond the USA borders, with South Korea saying it plans to investigate three of its diesel models.

John German, senior fellow with the global Council on Clean Transportation, the group that blew the whistle on VW, said the council didn’t expect to find any violators when it contracted with West Virginia University to test cars with diesel engines in the U.S.

And more than the potential class action lawsuits from disgruntled buyers, Volkswagen could also face criminal prosecution in both the U.S. and Germany.

Meanwhile, the EU today said it was too early to launch a European investigation into whether Volkswagen has cheated in pollution measuring tests. Volkswagen then allegedly came clean to the EPA.

The company’s chief executive, Martin Winterkorn, issued a statement on Sunday apologising for losing trust over the scandal.

“By making and selling vehicles with defeat devices that allowed for higher levels of air emissions than were certified to EPA, Volkswagen violated two important provisions of the Clean Air Act”, the EPA said in a press release on Friday.

The shares of the German carmaker Volkswagen (VW) plunged 18.6 percent as it is faced with emissions manipulations accusations in the US.

The EPA said the VW cars under investigation seemed to pass emissions tests, but in the real world, were actually emitting up to 40 times the national standard for nitrogen oxide, which is linked to asthma and lung illnesses.

VW overtook Toyota in the first half of this year to become the world’s biggest carmaker by sales but it’s now facing a sharp slowdown in its most profitable market – China.

The EPA also said Monday that it will screen for defeat devices in other manufacturers’ diesel vehicles now on the road, though declined to identify the automakers whose vehicles will be tested.

“At the moment I’d be surprised if Winterkorn can ride this out, but in Germany there’s often a slightly slower process in these matters”, said Christian Stadler, a professor of strategic management at Warwick Business School in England.

“We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case”.

“If South Korean authorities find problems in the VW diesel cars, the probe could be expanded to all German diesel cars”, he said.

Mr Winterkorn, who has led the company since 2007, said he was “deeply sorry” for breaking the public’s trust and that Volkswagen would do “everything necessary in order to reverse the damage this has caused”.