Germany’s automotive watchdog, the KBA, has ordered VW to recall 2.4 million vehicles in the country as a result of the diesel emissions scandal.
According to local media reports, the KBA earlier rejected VW’s proposals that car owners could voluntarily bring their cars in for repair.
Reports suggest Italian prosecutors are investigating alleged commercial fraud.
Separately, the man tipped to become VW’s North America boss has resigned.
Volkswagen said Winfried Vahland was leaving because of “differing views on the organization of the new group region”.
Last month, authorities in the US discovered some VW diesel cars had been fitted with a device to cheat emissions tests. The automaker subsequently admitted that up to 11 million cars worldwide could have the device fitted.
VW has launched a thorough investigation into the scandal, but new chairman Hans Dieter Poetsch has warned that answers would take “some time”.
The company has set aside €6.5 billion ($7.4 billion) to cover the costs of the scandal, but some experts believe the final bill could be much higher.
VW shares recovered slightly last week but are still down almost 20% since the scandal broke in mid-September.