Porsche has been told by the German transport minister to recall of 22,000 cars to remove what he says is illegal emissions-controlling software.
He said that Porsche would bear the cost of the recalls of the affected 3-liter Cayenne models.
It comes as Porsche’s sister company Volkswagen says it will refit almost a million more diesel cars in Germany.
VW admitted in 2015 that some of its diesel cars were fitted with a “defeat device” to cheat on emissions tests.
Allegations about Porsche first emerged in German magazine Der Spiegel last month.
The magazine said it was told by a source that the Porsche Cayenne had a “warm up mode” whose true purpose was to comply with emissions requirements. It said tests showed that once the car was confronted with small bends or a slope it switched to a different mode and emissions were higher.
German Transport Minister Alexander Dobrindt said on July 27: “There is no explanation why this software was in this vehicle.
“These vehicles are equipped with modern emissions-controlling technology so we think these vehicles are technically able to stick to emissions limits and we therefore believe Porsche will quickly be in a position to bring the software into conformity (with the law).”
That leaves close to a million other cars to be included in the new refit plans. These include models from subsidiary Porsche, VW’s Touareg sport utility vehicles, and some of its Transporter vans.
Separately, VW has been forced to defend its record after allegations that it teamed up with other German car giants to breach EU cartel rules.
Volkswagen said it was normal for manufacturers to exchange technical information to speed up innovation.
However, the company declined to comment on specific allegations that five German auto makers colluded on price and technology.
Daimler has also called the allegations speculative.
EU and German anti-trust regulators are looking at allegations that BMW, Daimler and VW, including its subsidiaries Audi and Porsche, collaborated for decades on many aspects of development and production, disadvantaging customers and suppliers.
VW reached a settlement with US and California authorities to recall 83,000 diesel cars with 3-liter diesel engines, resolving the last major part of its emissions cheating scandal.
The agreement, involving VW, Audi and Porsche cars, is another step towards allowing Volkswagen to put the emissions cheating scandal behind it.
In June the German auto maker agreed to a $15 billion settlement for another 475,000 vehicles affected by the scandal.
The Environmental Protection Agency (EPA) estimates that the total cost of the 3-liter settlement, including buybacks, repairs, and environmental remediation, at about $1 billion.
VW reached a $14.7 billion settlement with 550,000 owners of smaller, 2-liter diesel cars in September.
About one-quarter of the affected owners will be able to sell their vehicles back to VW at a price yet to be determined. The other 60,000 vehicles will be repaired at no cost to their owners, becoming fully compliant with clean-air laws.
US District Judge Charles Breyer said owners of the 3-liter cars made between 2009 and 2016 would get “substantial compensation” for having them fixed or repaired.
However, there were some remaining issues to be resolved and another hearing will be held on December 22, he said.
VW spokeswoman Jeannine Ginivan said the deal was “another important step forward in our efforts to make things right for our customers”.
The company admitted in September 2015 to installing secret software in 475,000 US 2-liter diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing than they really were. They emitted up to 40 times the legally allowable pollution levels.
The $15 billion settlement in June covered those vehicles, including an offer to buy them all back.
The US Justice Department said VW had agreed to contribute another $225 million to a fund to offset excess diesel emissions.
In a separate filing, California’s government said VW would increase the number of electric vehicles it sells in the state.
Robert Bosch, the German engineering company that made the software for the VW diesels, has also agreed in principle to settle civil allegations at a cost of about $300 million.
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.
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.
Volkswagen has reported its first drop in VW brand sales in 11 years as the company continues to cope with its emissions scandal.
The VW brand sales fell 4.8% in 2015 to 5.82 million cars from 6.12 million a year earlier.
Falling demand in China and US added to the losses as orders fell in December.
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 began declining after the emissions scandal came to light in September 2015. Deliveries fell 5.3% in October, 2.4% in November and 7.9% in December compared with those months the previous year.
The underperformance at VW’s largest division by sales and revenue pulled down annual group deliveries by 2% to 9.93 million cars, the first drop in 13 years, VW said.
Speaking on January 6, Volkswagen chief executive Herbert Diess said he was “optimistic” the company would find a solution soon.
“We will bring a package together which satisfies our customers first and foremost and then also the regulators,” he said.
Regulators appear been less confident. The Environmental Protection Agency (EPA) which uncovered the scandal, said on January 4 that VW had not yet “not produced an acceptable way forward”.
VW will meet the EPA in Washington next week to discuss its plan.
On January 4, the Department of Justice filed a lawsuit against VW for the use of the emissions devices, which involve computer software that can detect when cars are being tested.
The Connecticut Attorney General George Jepsen said on January 8 that the company was not cooperating with the investigation.
VW has been withholding corporate emails between executive related to the emissions scandal, using German law as the basis for the refusal.
“I find it frustrating that, despite public statements professing cooperation and an expressed desire to resolve the various investigations that it faces following its calculated deception, Volkswagen is, in fact, resisting cooperation by citing German law,” George Jepsen said in a statement.
In 2015, a record 17.47 million cars were sold, according to Autodata. The car data company has been keeping records since 1980.
General Motors, one of the biggest US automakers, had an 8% increase in sales.
Mercedes-Benz USA had its most successful year since entering the country, with sales rising 3.8%.
VW has seen its US sales decline sharply as a result of the continuing emissions scandal.
November sales were down by 24.7% from the previous year.
The German automaker said the drop reflected “the impact of the recent stop-sale for all 2.0L 4-cylinder TDI vehicles as well as for the 3.0L V6”.
VW was forced to stop selling 2 and 3 liter diesel engine cars after it was discovered they contained software that disguised emission levels.
The group sold fewer than 24,000 cars in November, with the Golf and Passat models seeing the steepest declines.
VW saw a very minor sales decline of 0.24% in October. The US is not a large market for Volkswagen. Even before the scandal it had struggled to gain traction in a market where larger SUVs and trucks are popular.
Volkswagen has admitted to installing devices that lowered the emissions levels of diesel engine cars during testing, but that increased emissions during normal driving.
VW CEO Matthias Muller has previously apologized for the scandal and said: “My most urgent task is to win back trust for the Volkswagen Group.”
Other automakers have seen a steady rise in US sales this year.
Sales of General Motors cars rose by 1.5% in November. Toyota and Fiat Chrysler each reported a 3% increase in their November sales compared with 2014.