VW chairman of the board of directors Hans Dieter Potsch says a chain of errors led to the emissions scandal and that its top priority is winning back trust.
Speaking at a news conference, Hans Dieter Potsch said: “We are talking here not about a one-off mistake but a chain of errors.”
He said Volkswagen would be “relentless in seeking to establish who was responsible” for the scandal.
VW CEO Matthias Muller said it was “fighting for every customer”.
However, he said a massive slump in sales had not occurred in the wake of the scandal.
In September, US regulators found some VW diesel cars had a “defeat device” – or software – to cheat emissions tests.
The automaker said the problem began when it decided to launch a large-scale promotion of diesel vehicles in the US in 2005, but found it impossible to meet strict emissions limits in force in that country in time.
VW said it had agreed steps to improve supervision of engine software development to prevent future manipulation.
Matthias Mueller said it was relatively simple and inexpensive to fix the millions of affected cars, but this had not been possible before, as the technology for the fixes was not available when the cars were built. In any case, the company was unaware at the time that there was a problem.
VW will in future undertake “real-life” tests, which will be checked by both internal and external third parties.
Hans Dieter Potsch said: “No business justifies crossing legal and ethical boundaries.”
He said it was likely that only a limited number of people took part in the deception and said they would not be named as yet, adding that it was impossible to stop misconduct by individuals.
However, he added that the actions taken by the company would make such actions that much more difficult in future.
Law firm Jones Day is conducting an investigation into what happened. That, Hans Dieter Potsch said, was making good progress, but would take some time to conclude.
The cheat device affects up to 11 million VW cars worldwide.
VW has reported a €3.48 billion operating loss for Q3 of 2015, and a €2.52 billion pre-tax loss triggered by its emissions scandal.
The German automaker has taken a charge of €6.7 billion ($7.4 billion) to cover the costs of the scandal.
In September, Volkswagen admitted installing software designed to cheat emissions tests in 11 million of its diesel cars worldwide.
VW CEO and chairman of the Board of Management, Matthias Müller, said: “The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear. We will do everything in our power to win back the trust we have lost.”
The company said it expects profits for the full year to be “down significantly” as a result of the costs of dealing with the emissions scandal, but it said that it is still forecasting a rise of up to 4% in sales revenue.
Meanwhile VW has started retrenching and announced earlier this month it would reduce its research and development budget. In the last three months it has reduced R&D by over €1 billion.
Volkswagen’s new CEO Matthias Muller has said the automaker can shine again in two to three years.
Addressing the company’s top managers on October 15, Matthias Muller said VW needed to become leaner and take decisions more rapidly.
The comments come as VW said it would recall 8.5 million cars in Europe as a result of the diesel emissions scandal.
The move was prompted by Germany’s automotive watchdog, which had earlier told VW to recall 2.4 million vehicles in the country.
German media reports suggest the KBA had rejected VW’s proposals that car owners could voluntarily bring their cars in for repair.
VW gave no details of the recall and said it would contact individual customers directly.
It added that it was working on solutions to fix the recalled cars “at full speed”.
Matthias Muller took over as VW’s chief executive last month when the previous head, Martin Winterkorn, stepped down as a result of the scandal.
He told managers on October 15: “We will significantly streamline structures, processes and (decision-making) bodies. We must become leaner and take decisions more rapidly.”
“Our competitors are only waiting for us to fall behind on technology matters because we are so preoccupied with ourselves. But we won’t let that happen,” Matthias Muller added.
Meanwhile, Italian police have raided VW offices in Verona and Lamborghini offices in Bologna.
Reports suggest Italian prosecutors are investigating alleged commercial fraud.
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.
Volkswagen 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.
Separately, Winfried Vahland, who was 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”.
Hans Dieter Poetsch has been appointed as VW’s new chairman, following a board meeting to discuss the emissions scandal.
Former VW finance chief said it would be “some time” before the carmaker could uncover the details of the emissions test cheating.
Earlier, the automaker said it expected to start a recall of cars affected by the scandal in January 2016.
All affected cars will be fixed by the end of 2016, VW CEO Matthias Muller told German newspaper Frankfurter Allgemeine Zeitung.
Only a few employees have been involved in the scandal, Matthias Muller added in the interview.
In his first pronouncement as chairman, Hans Dieter Poetsch said the company’s internal inquiry into the scandal would take time.
“Nobody is served by speculation or vague, preliminary progress reports,” he said.
“Therefore it will take some time until we have factual and reliable results and can provide you with comprehensive information,” Hans Dieter Poetsch added, before declining to take any questions.
VW has said emissions test-cheating software is present in 11 million diesel vehicles.
The company said it would also look into its various brands and models, singling out Bugatti, its supercar marque.
Earlier, Mathias Muller told employees at VW’s Wolfsburg home plant in Germany the company is facing changes that “will not be painless”.
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,” he added.
VW has set aside €6.5 billion to cover the cost of the scandal, but analysts say the final bill could be much higher, with potential regulatory fines in the US, class action lawsuits and the cost of fixing the cars.
The sale of VW diesel-engine models which could have devices capable of tricking emission tests has been temporarily halted in Switzerland.
The move could affect 180,000 cars – not yet sold or registered – in the Euro5 emission category.
This comes after VW, the world’s largest automaker, admitted cheating on emissions tests in the US.
Meanwhile, Matthias Muller has been named new VW CEO in the wake of the scandal.
He succeeds Martin Winterkorn, who resigned on September 23.
The row erupted after it emerged that some VW cars being sold in the US had devices in diesel engines that could detect when they were being tested, changing the engine performance to improve results.
The ban was announced by the Swiss Federal Roads office on September 25.
In a statement, it said vehicles that have 1.2-litre 1.6-litre and 2.0-litre diesel engines of VW models – including VW’s Audi, Seat and Skoda brands – could be affected.
The ban does not apply to vehicles that are already in circulation or cars with Euro6 emission category engines.
The Swiss authorities have also set up a taskforce to fully investigate the issue.
After his appointment, Matthias Muller said restoring the company’s reputation was his top priority.
“My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation.”
He also announced sweeping changes to the way the company was run, including handing greater autonomy to regional divisions.
Matthias Muller said he would tighten up procedures at the company: “At no point was the safety of our customers in danger. We will now have even stricter compliance. Our objective is that the people continue to use and drive our vehicles with confidence and pleasure. That’s 80 million people driving our cars worldwide.”
The EPA’s findings of the scandal cover 482,000 cars in the US only, including the VW-manufactured Audi A3, and the VW brands Jetta, Beetle, Golf and Passat.
But VW has admitted that about 11 million cars worldwide are fitted with the so-called “defeat device” – 2.8 million of them in Germany – and further costly recalls and refits are possible.
Half of VW’s sales in Europe – the company’s biggest market – are for diesel cars.
VW shares plunged around 30% in the days after the scandal broke.
Transport authorities in several countries have announced their own investigations.