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German auto maker Volkswagen has gone on trial in what is the first court case against the company over the diesel scandal.

Investors are pursuing VW for about €9.2 billion in damages, claiming the company should have come clean sooner about falsifying emissions data.

Volkswagen shares crashed after disclosure in 2015 that its diesel technology emitted illegal levels of pollution.

Andreas Tilp, a lawyer for the plaintiffs, told the court: “VW should have told the market that they cheated.”

“We believe that VW should have told the market no later than June 2008 that they could not make the technology that they needed in the United States,” he told the Braunschweig higher regional court.

Dieselgate: VW Reaches $15 Billion Settlement with US Car Owners

Dieselgate: VW Sets Emissions Scandal Provisions to €16.2 Billion

Shareholders representing 1,670 claims are seeking compensation for the near 40% slide in VW’s share price triggered by the scandal, which broke in September 2015 and has cost the company €27.4 billion in penalties and fines so far.

The legal action has been brought by the Deka investment fund, which is being used a template for a further 1,600 lawsuits.

The case involves about 50 lawyers, and interest in the hearing is so great that it had to be moved from the court house to a nearby conference centre.

The court case is expected to take at least until 2019 to be fully decided.

Former executives from VW, Porsche and their sister company Audi are under criminal investigation in Germany.

VW has already been fined €1 billion by German prosecutors over its diesel emissions scandal. It has also paid a fine of $4.3billion in the US to resolve criminal and civil penalties.

The auto maker has admitted its responsibility for the diesel crisis.

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Volkswagen has announced that the diesel emissions scandal will cost the company an extra $3 billion (€2.5 billion), because engines are proving “far more technically complex and time consuming”.

The additional cost, for fixing engines in the US, takes the total bill to $30 billion.

Two years after the diesel emission cheating scandal first emerged, VW is still struggling to put the crisis behind it.

Separately Munich prosecutors made an arrest in connection with the scandal.

German media reports have named the person taken into custody as Wolfgang Hatz, former board member at VW unit Porsche. But there has been no official confirmation of his identity.

Wolfgang Hatz was head of Research and Development at VW-owned Porsche and had held other roles in the VW group, including in engine development at Audi. He was suspended after the diesel emissions test-cheating was exposed. He then left the company.

VW Emissions Scandal: Company to Provide Two Year Guarantee for Europe Cars

VW Emissions Scandal: CEO Mathias Muller Investigated by Stuttgart Prosecutors

Diesel Emissions Scandal: VW Pleads Guilty to Three Charges in US

In 2016, Porsche said no evidence had been found against Wolfgang Hatz.

Wolfgang Hatz was reportedly close to former VW chief executive, Martin Winterkorn, who has denied any knowledge of the “defeat devices” which allowed vehicles to artificially reduce emissions during tests before their existence was exposed publicly.

Another former Audi executive, Giovanni Pamio, was taken into custody earlier this year, at the request of the US Department of Justice. One man has so far been jailed in connection with the scandal: Volkswagen engineer James Liang received a 40 month sentence in a US court last month.

News of the additional financial burden from dealing with vehicles in the US underlines the difficulty VW is having extricating itself from the scandal.

VW shares initially fell sharply on September 29 although they later recovered most of the lost ground.

The automaker first admitted in September 2015 that it had used illegal software to cheat US emissions tests.

Since then VW has been adapting its cars to meet legal requirements. However,  the process in the US is proving tougher than expected.

It is also amending cars in Europe, but the process there is more straightforward, VW said.

The additional costs will be reflected in Volkswagen’s third quarter results, which will be reported next month.

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Volkswagen will provide a two year guarantee for the cars in Europe fitted with emissions cheating devices which it agreed to modify.

According to the auto maker, the two year guarantee will cover exhaust and emissions control parts.

The European Commission has been putting pressure on VW to compensate customers over its emissions scandal, but the company has refused.

And European class action lawsuits are picking up steam.

The guarantee has conditions attached -it will only cover certain car parts in vehicles that have been driven for under 250,000km (about 155,000 miles), and will depend on the service history of the car and the age of the affected parts.

In September 2015, VW admitted to US regulators that it had cheated on emissions tests there using software installed in as many as 11 million diesel vehicles sold worldwide – the majority of them in Europe.

In the aftermath of the diesel emissions scandal, VW agreed to modify millions of vehicles in Europe which were equipped with the software capable of undermining the emissions testing process.

In the US, VW agreed to pay substantial compensation and buy back cars.

However, emissions controls are not as tight in Europe, and VW has resisted paying compensation, despite pressure from the European Commission.

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VW CEO Matthias Muller is being investigated by Stuttgart prosecutors in connection with the emissions scandal that erupted at the auto maker in late 2015.

It is the first time Mathias Muller has been named in connection with official investigations into the affair.

His predecessor, Martin Winterkorn, and the current VW chairman, Hans-Dieter Poetsch, are also under scrutiny.

Mathias Muller became VW chief executive after the scandal broke.

However, at the time he was a board member of Porsche SE, the holding company which owns a majority of voting shares in the Volkswagen Group.

Image source Wikimedia

Mathias Muller was also chief executive of the Porsche sports car business, a subsidiary of the VW Group and Porsche SE.

The investigation is not looking into the causes of the scandal itself, but at how the board of Porsche SE, including Mathias Muller, responded to it.

Prosecutors suspect that executives deliberately delayed releasing information to investors about the scale of the scandal, as well as its financial consequences.

A similar investigation, into possible market manipulation by executives within the VW Group, was launched in Volkswagen’s home state of Lower Saxony in 2016.

In the wake of the scandal, VW’s share price dropped dramatically. Investigators are examining whether executives knew about the magnitude of the unfolding scandal – which began in the US – but failed to inform the markets in a timely manner.

As a rule, executives are expected to keep investors updated as soon as potentially price-sensitive information comes to light.

Porsche SE said the allegations were unfounded, adding it had complied with disclosure rules.

The holding company is based in Stuttgart. It is owned by the Porsche and Piech families – descendants of Ferdinand Porsche, the man who designed the Volkswagen Beetle and founded the sports car business that bears his name.

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VW has pleaded guilty to three charges as part of a $4.3 billion agreement with the US authorities over the diesel emissions scandal.

The automaker has pleaded guilty to conspiracy to commit fraud, obstruction of justice and entry of goods by false statement.

VW general counsel Manfred Doess told a court in Detroit the company was “guilty on all three counts“.

Manfred Doess said the criminal acts occurred in both Germany and the United States.

Volkswagen admitted that vehicles were fitted with illegal software which allowed them to cheat emissions tests over a six-year period.

John Neal, an assistant US attorney, told the district court that the scheme “was a well thought-out, planned offensive that went to the top of the organization”.

Under the deal with the DoJ, VW agreed to major reforms and scrutiny by an independent monitor for three years after admitting to installing the secret software in 580,000 US vehicles.

The devices enabled VW’s diesel vehicles to emit up to 40 times legally allowable pollution.

Accepting VW’s guilty plea, district judge Sean Cox said: “This was a very, very serious crime.”

VW has agreed to change the way it operates in the United States and other countries as part of the settlement.

In January 2017, VW agreed to pay $4.3 billion in US civil and criminal fines.

A company spokeswoman said it “deeply regrets the behavior that gave rise to the diesel crisis”.

Since the emissions scandal broke in September 2015, VW has agreed to pay about $25 billion to address claims from owners, regulators, states and dealers in the US.

VW has come under pressure to pay compensation in other markets too.

However, the fallout from the scandal has not stopped VW from growing its sales. In 2016, VW overtook Toyota as the world’s best-selling car maker.

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German car giant Volkswagen has agreed to pay at least $1.2 billion to fix or buy back 78,000 diesel cars in the United States to settle more emissions-cheating claims.

Without regulatory approval, VW could be forced to buy back all of the cars, costing it about $4 billion.

The deal, another in its long-running emissions scandal, still needs approval from the courts.

Car components company Robert Bosch GmbH, a VW supplier, has also agreed to pay $327.5 million to US owners of affected cars.

The proposed settlements for the 3-liter cars are the last major US hurdle for VW over its emissions scandal.

VW previously agreed to spend up to $10 billion to compensate the owners of about 482,000 2-liter vehicles after it admitted it had installed secret software to disguise emissions.

On February 1, the Federal Trade Commission (FTC) said that US customers who bought the 3-liter diesel cars would be fully compensated “through a combination of repairs, additional monetary compensation, and buybacks for certain models”.

Owners of 2009 to 2012 models could get between $26,000 to $58,000 for a buyback, depending on the model, mileage, and trim of the car, the FTC said.

For owners and people leasing 2013 to 2016 models, VW is expected to get regulatory approval for a fix that makes the cars compliant with US environmental regulations, the FTC added.

However, if VW fails to get EPA and the California Air Resources Board approval for the modification within a certain time frame, it must offer to buy back those vehicles, upping the amount it has to pay to about $4 billion.

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According to German prosecutors, former VW CEO Martin Winterkorn may have known the automaker was cheating on emissions tests earlier than he admitted.

He quit in September 2015 after VW admitted to using software to lower the emissions from its diesel vehicles during tests.

Martin Winterkorn has since denied knowing of the violations until late in August 2015, shortly before the board reported them.

However, German authorities said they were now investigating Martin Winterkorn for fraud.

Braunschweig prosecutors said they had searched 28 homes and offices this week in connection with the scandal.

As a result, the number of people accused of misconduct had risen from 21 to 37, including Martin Winterkorn.

German prosecutors said in a statement: “Sufficient indications have resulted from the investigation, particularly the questioning of witnesses and suspects as well as the analysis of seized data, that the accused [Martin Winterkorn] may have known about the manipulating software and its effects sooner than he has said publicly.”

Earlier this month, VW admitted to US prosecutors that about 40 employees had deleted thousands of documents in an effort to hide systematic emissions cheating from regulators.

VW was also fined $4.3 billion by US authorities and agreed to plead guilty to criminal charges.

In addition, VW has agreed to a $15 billion civil settlement with environmental authorities and car owners in the US.

The company is also facing 8.8 billion euros ($9.41 billion) in damage claims following the collapse of VW’s share price after the scandal broke.

VW shares slumped by a third in the immediate aftermath of the scandal and are still 7% below their September 2015 level.

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German automaker Volkswagen has agreed a draft $4.3 billion settlement with the Department of Justice and US Customs over the emissions-rigging scandal.

VW also said it would plead guilty to breaking certain US laws.

The company said it was in advanced discussions with the DoJ and US Customs about the deal.

The final agreement has yet to be approved by VW’s management and supervisory board, which could happen later on January 11.

The company said it had negotiated a “concrete draft” of a settlement with US authorities that included criminal and civil fines totaling $4.3 billion, as well as appointing an independent monitor for the next three years.

The fine means that the total costs associated with the emissions cheating scandal are set to exceed the $19.2 billion VW has set aside to deal with the issue.

Volkswagen has already agreed to a $15 billion civil settlement with environmental authorities and car owners in the US.

The scandal erupted in September 2015 when the EPA found that many VW cars sold in America had a “defeat device” – or software – in diesel engines that could detect when they were being tested and adjust the performance accordingly to improve results.

VW subsequently admitted cheating emissions tests in the US and many countries throughout the world.

On January 9 it emerged that VW executives knew about emissions cheating two months before the scandal broke, but chose not to tell US regulators, according to court papers.

The executives involved include Oliver Schmidt, who was in charge of VW’s US environmental regulatory compliance office from 2012 until March 2015.

On January 9, Oliver Schmidt was charged with conspiracy to defraud and has been remanded ahead of a court appearance on January 12.

Volkswagen has reportedly reached a $15 billion settlement with US car owners after admitting it cheated emission tests.

The German auto maker would offer to repair or buy back the affected diesel vehicles and pay owners compensation, according to sources close to the talks.

In 2015, US regulators discovered that VW cars were fitted with software that could distort emissions tests.

VW subsequently said 11 million cars were affected worldwide.

The US settlement is still pending approval by a judge, but it would be the largest car scandal settlement in the country’s history. The details are expected to be announced on June 28.VW CO2 issue 2015

According to news agencies, the legal settlement sets aside $10 billion to repair or buy back around 475,000 affected vehicles with 2-litre diesel engines, and to compensate owners with a payment of up to $10,000.

Car owners would still be able to decline the VW offer and sue the company on their own.

According to the sources quoted by news agencies, the deal also includes $2.7 billion in funds to offset excess diesel emissions and $2 billion for research into green energy and environment-friendly cars.

VW installed software in diesel engines to detect when they were being tested so the cars could cheat the results.

Some models could have been pumping out up to 40 times the legal limit of the pollutant, nitrogen oxide, regulators disclosed.

The company told its shareholders last year it had set aside $7.3 billion to help defray the potential costs of a recall or regulatory penalties.

That amount though might not be enough – VW faces as much as $20 billion in fines for Clean Air Act violations alone.

The increased emissions provision pushed VW to an annual pre-tax loss of €1.3 billion, compared with a profit of €14.7 billion the previous year.

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Volkswagen has announced it set aside more than double provisions for the diesel emissions scandal to €16.2 billion.

In 2015, VW told shareholders that €6.7 billion had been set aside for potential costs or recalls.

The increased sum included the cost of fixing cars that violate air pollution standards, buying back vehicles and legal costs.

The move comes as German carmakers agreed to recall 630,000 diesel vehicles to tweak engine software.

German transport minister Alexander Dobrindt said Mercedes Benz, Opel and Porsche as well as VW and Audi would adjust settings that increased levels of emissions such as nitrogen dioxide in some diesel cars.

Shares in Daimler fell 4.6% in Frankfurt after the Mercedes owner said it had begun an internal investigation into its diesel emissions testing at the request of the US Justice Department.VW buy back deal US

Daimler said net profit for Q1 of 2016 fell by a third to €1.4 billion, held back by costs associated with the launch of the new E-Class range. The bigger-than-expected decline came despite a 2% rise in revenue to €35 billion as sales rose 7% to 683,885 vehicles.

VW CEO Matthias Muller said he could not put a figure on the total cost of the emissions scandal until a final deal was reached with US authorities.

Nor could the company release preliminary findings from an investigation it commissioned from law firm Jones Day until reaching an agreement, it said.

VW still faced the DoJ fines as part of an expected civil settlement, as well as possible criminal charges.

On April 21, a US court disclosed details of a deal between VW and the DoJ for more than 500,000 American owners of its diesel cars affected by the emissions cheating.

The deal will involve buybacks and “substantial” compensation for owners of mostly two-liter vehicles.

The increased emissions provision pushed VW to an annual pre-tax loss of €1.3 billion, compared with a profit of €14.7 billion the previous year.

VW expected group sales to fall by up to 5% in 2016.

Chief financial officer Frank Witter said: “We are again operating in an exceedingly challenging environment in which global demand for new vehicles is declining, exchange rates and interest rates remain highly volatile and competition in many of our markets is intensifying.”

VW shares closed down 1.7% in Frankfurt on April 22 and are more than 40% lower than at this time last year.

Volkswagen has reached a deal with the US authorities in the diesel emissions scandal.

The German giant will offer “substantial compensation” and car buy-back deals as part of the settlement.

Final details of the packages offered will be announced in June, but a court had given VW and regulators until April 21 to reach a deal in principle.

In 2015, US regulators discovered that VW cars were fitted with software that could distort emissions tests.

The automaker subsequently said 11 million cars worldwide were affected.

Details of the preliminary agreement were announced in a California court. US district court Judge Charles Breyer said the settlement would include a buyback offer for nearly 500,000 2.0-litre vehicles.VW buy back deal US

He did not give details of how much car owners would offered in compensation, but said the deal between Volkswagen, the US government and private lawyers would be “substantial”.

Judge Charles Breyer said VW would also pay into an environmental fund and commit other money to promote green car technology.

The company told its shareholders in 2015 it had set aside $7.3 billion to help defray the potential costs of a recall or regulatory penalties, but that figure could rise. The company faces as much as $20 billion in fines for Clean Air Act violations alone.

VW installed software in the diesel engines to detect when they were being tested and cheat the results. Some models could have been pumping out up to 40 times the legal limit of the pollutant, nitrogen oxide, regulators disclosed.

The company’s lawyer, Robert Giuffra said: “Volkswagen is committed to winning back the trust of its customers, its dealers, its regulators and all of America.”

The agreements are “an important step forward on the road to making things right,” he added.

VW said in a statement that it “intends to compensate its customers fully and to remediate any impact on the environment from excess diesel emissions”.

The automaker said a deal in principle had been reached with the Justice Department, the Environmental Protection Agency and the California Air Resources Board.

VW added that it had “reached an agreement on the basic features of a settlement with the class action plaintiffs in the lawsuit in San Francisco. This agreement will be incorporated into a comprehensive settlement in the coming weeks”.

The deal announced on April 21 covers mostly 2-liter vehicles.

Judge Charles Breyer said he expects an agreement between VW and regulators covering about 90,000 larger vehicles and SUVs to be addressed “expeditiously”.

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Volkswagen has reached a deal with the US authorities under which the automaker could offer to buy back up to 500,000 diesel cars in the US.

VW has also agreed a compensation fund for owners.

The German car giant is expected to reveal the deal to a Federal judge in San Francisco on April 21.

A VW spokeswoman, the Environmental Protection Agency (EPA) and the Justice Department declined to comment.

The company could also offer to repair diesel vehicles if US regulators approve a fix at a future date, reports said.VW buy back deal US

In March, US District Judge Charles Breyer gave VW until April 21 “to announce a concrete proposal for getting the polluting vehicles off the road.”

Judge Charles Breyer said in March the “proposal may include a vehicle buy back plan or a fix approved by the relevant regulators that allows the cars to remain on the road with certain modifications.”

In September 2015, the EPA found that VW cars being sold in the US had a “defeat device” – or software – in diesel engines that could detect when they were being tested, and change the performance to improve results.

Some models could be pumping out up to 40 times the legal limit of the pollutant nitrogen oxide.

In March, VW CEO Matthias Muller said that a deal with US authorities over its emissions scandal could take longer and cost more than expected.

Matthias Muller warned that the €6.7 billion set aside to cover the costs of the scandal might not be enough.

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VW has announced that it will not release its results nor hold its shareholders’ meeting on time, as it needs more time to work out its accounts as a result of 2015’s emissions crisis.

The automaker was due to release results on March 10 and hold its shareholders’ meeting towards the end of April.

Volkswagen has not said by how much these events will be delayed.

The company says results will be about the same as in 2014, although the cost of the crisis will eat into those.

VW said it was working on “valuation calculations”.VW results delayed 2016

Sales in VW-branded cars dipped last year after the scandal – which affected 11 million cars – came to light in September. Deliveries fell 5.3% in October, 2.4% in November and 7.9% in December compared with those months in 2014.

It was its first drop in VW-branded sales in 11 years as the company continues to cope with the emissions scandal.

VW has promised it will have a fix in the coming weeks for the millions of US cars with defeat devices that disguised emission levels in diesel cars.

Sales of VW-brand cars fell 4.8% in 2015 to 5.82 million cars from 6.12 million a year earlier.

The Environmental Protection Agency (EPA) is suing the company over what it says were 600,000 affected vehicles and a US law firm is conducting an investigation into who made the decisions to cheat.

VW says it is sticking to its plan to publish the findings of its investigation into the scandal in the second half of April.

Results from Porsche, which is owned by Volkswagen, are also being delayed.

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Toyota has overtaken VW in global vehicle sales after releasing figures for the first nine months of 2015.

The Japanese automaker sold 7.5 million in the first three quarters of 2015, beating VW’s 7.43 million and General Motors’ 7.2 million.

After six months of 2015, VW was ahead of Toyota, in pole position for the first time.

VW’s emissions scandal emerged towards the end of September.

The discovery of software that was able to mislead emissions tests on diesel cars may have more effect on VW’s sales in the remainder of the year.Toyota Overtakes VW in Global Car Sales

Toyota’s sales for the first nine months were 1.5% below the level at the same stage last year.

Toyota first overtook GM to take the top slot in 2008 and has kept it every year since, except 2011 when GM was the top seller after a tsunami in north-eastern Japan disrupted Toyota’s production.

Separately, there was relief for General Motors on October 25 when it reached an agreement with the United Auto Workers union, averting a threatened strike.

Details of the four-year labor deal were not released. It will now go to a vote of UAW leaders and then the union’s 52,700 workers at GM.

“We believe that this agreement will present stable long-term significant wage gains and job security commitments to UAW members now and in the future,” said UAW president Dennis Williams.

The union had threatened that it would terminate its existing contract at midnight Eastern time on October 25, meaning there could have been a strike.

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VW has announced it is looking into more of its diesel engines to see whether they also contain software used to manipulate emissions test data.

The German automaker has been embroiled in a scandal over emissions test rigging on its EA 189 engines.

VW is now looking into older versions of EA 288 engines, although versions sold in Europe are not affected.

Last month, VW said that 11 million diesel cars were affected by the scandal, first uncovered by the US regulator, the Environmental Protection Agency (EPA).VW diesel engine investigation 2015

The EPA discovered that certain engines were fitted with a cheat-device that could detect when the car was being tested and reduced emissions to improve results.

Volkswagen had previously said that the software was installed on cars with variants of the EA 189 diesel engine built to the “Euro 5” emissions standard.

VW is now checking whether models with the EA 288 diesel motor built to the same emissions standard may also have the software.

Newer EA 288 cars built to the “Euro 6” standard are said not to be affected.

Criminal investigations have been launched in Germany, France and Italy.

VW has set aside €6.5 billion to cover the costs of the scandal but many analysts expect this will not be enough.

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VW has announced it will recall 8.5 million vehicles in Europe as a result of the diesel emissions scandal.

The move was prompted by Germany’s automotive watchdog (KBA), which earlier told Volkawagen to recall 2.4 million domestic cars.

German media reports suggest the KBA earlier rejected VW’s proposals that car owners could voluntarily bring their cars in for repair.

Meanwhile, Italian police have raided VW offices in Verona and Lamborghini offices in Bologna.

Reports suggest Italian prosecutors are investigating alleged commercial fraud.

Separately, the man tipped to become VW’s North America boss has resigned.

VW said Winfried Vahland was leaving because of “differing views on the organization of the new group region”.VW recall Europe 2015

The automaker gave no details of the recall and said it would contact individual customers directly.

VW added that it was working on solutions to fix the recalled cars “at full speed”.

Last month, authorities in the US discovered some VW diesel cars had been fitted with a device to cheat emissions tests. VW 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.

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VW’s new CEO, Matthias Muller, said the car giant expects to start a recall of cars affected by its emissions scandal in January 2016.

All affected cars will be fixed by the end of 2016, Matthias Muller told German newspaper Frankfurter Allgemeine Zeitung.

Only a few employees have been involved in the scandal, he added in the interview.

Volkswagen has said emissions test-cheating software is present in 11 million diesel vehicles.

The automaker would also look into its various brands and models, singling out Bugatti, its supercar marque.

Earlier, Matthias Muller told employees at VW’s Wolfsburg home plant in Germany the company is facing changes that “will not be painless”.VW recall emissions scandal 2015

All investments that were not deemed absolutely necessary would be abandoned or delayed, he said.

Technical solutions were “within view” and the firm would do everything it could to keep jobs secure, he added.

Future investment in plant, technology and vehicles would be put “under scrutiny”.

“We will do everything to ensure that Volkswagen will stand for good and secure jobs in the future,” Matthias Muller added.

The emissions scandal engulfed VW after it admitted cheating emissions tests in the US.

In Europe, Italy and France have opened investigations into the rigging of the tests.

VW is suspending the sale of 4,000 vehicles in the UK, saying the vehicles may be equipped with the device that cheated emissions tests in the US.

The move will involve vehicles across the VW group including the VW, Audi, Skoda and Seat brands.

VW said it was a temporary measure and that it intended to return the vehicles for sale once a fix is identified for the cars.

Despite the scandal that began almost two weeks ago, VW customers could still buy vehicles that had the rogue software.

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France has opened an inquiry into Volkswagen over the rigging of emission tests.

The Paris prosecutor said it was investigating suspicions of “aggravated deception”.

VW admitted that 11 million of its vehicles were fitted with devices which allowed them to cheat emissions tests.VW emissions France investigation

The automaker faces fines of up to $18 billion in the US and has already put aside $7.8 billion to pay for the scandal.

On October 2, Swiss road authorities put a ban on the sale of new VW diesel cars, as well as used imported ones.

That follows news that in the UK, sales would be suspended of 4,000 vehicles, including Skoda, Audi and Seat brands, thought to be fitted with the cheat device.

In the US, VW has also stopped the sale of all new diesel cars.