VOLKSWAGEN has admitted that 11 million vehicles worldwide are fitted with software to cheat emissions tests and taken a 6.5 billion euros (£4.7 billion) profit hit to deal with the growing scandal.
The German car maker is facing deepening scrutiny after tests by US regulators forced it to admit cheating on the tests for nearly 500,000 vehicles, and authorities across the world launched further probes.
Volkswagen admitted the outcome of the investigations could add to the hit to its profits.
It said it was “working at full speed to clarify irregularities concerning a particular software used in diesel engines”.
VW said it had found “discrepancies... involving some 11 million vehicles worldwide”.
It comes after the Environmental Protection Agency (EPA) in the US said cars had been fitted with sophisticated software algorithms which detect when they are undergoing official emissions testing and turn on full emissions controls.
This is a type of software known as a “defeat device”. Once on the road, the cars produced nitrogen oxide pollutants at up to 40 times the legal standard.
Volkswagen said discrepancies related to type EA 189 engines. It said: “A noticeable deviation between bench test results and actual road use was established solely for this type of engine.”
The company said it was “working intensely to eliminate these deviations through technical measures” with German and other authorities.
It added: “To cover the necessary service measures and other efforts to win back the trust of our customers, Volkswagen plans to set aside a provision of some 6.5 billion euros recognised in the profit and loss statement in the third quarter.”
In the UK, campaign group Transport & Environment claimed the technology used in VW’s cars was also used by other manufacturers meaning millions of vehicles in the UK might have to be recalled.
An estimated 29,000 deaths each year in Britain are caused by long-term exposure to air pollution.
The Clean Air in London campaign described the effects of diesel vehicle emissions as the “biggest public health catastrophe”.
Founder Simon Birkett called for a royal commission to investigate “if manufacturers have deliberately contributed to that problem in some way”.
The Society of Motor Manufacturers and Traders (SMMT) insisted there was no evidence that manufacturers in the UK attempt to mislead emission testers.
Chief executive Mike Hawes, said: “The EU operates a fundamentally different system to the US - with all European tests performed in strict conditions as required by EU law and witnessed by a government-appointed independent approval agency.”
VW boss Martin Winterkorn has said he is “deeply sorry” over the scandal.
The scandal has prompted questions about Mr Winterkorn’s future. Meanwhile the firm’s US boss Michael Horn reportedly said: “We have totally screwed up.”
Volkswagen now faces the cost of recalling millions of vehicles as well as a fine of up to 18 billion US dollars (£11.6 billion) in the US.
The US findings covered 482,000 cars built in the last seven years including the Audi A3, VW Jetta, Beetle, Golf and Passat models.
South Korea has also launched a probe, which could add a further 4 billion US dollars (£2.5 billion) if it discovers wrongdoing. The investigation covers the Golf, Jetta, Beetle and Audi A3 models.
Meanwhile the government in Germany has now demanded new tests and there are also calls by France for a Europe-wide investigation into VW as well as French car makers’ practices. The European Commission has contacted VW and US authorities over the findings.
The US said it was widening its investigation to ensure other manufacturers were not using similar schemes to those used by Volkswagen.
Shares in the company, down 19% on Monday, fell by a further 18%. Rivals such as Renault, BMW and Mercedes owner Daimler - none of which have been drawn into the scandal themselves - also saw shares fall.
Volkswagen recently edged out Japan’s Toyota to become the world’s top-selling car maker, but it has had a tough year amid signs of faltering sales in the US and China.
Its share price has fallen from more than 250 euro to close to the 100 euro mark following the emissions scandal.
The manufacturer now apparently faces a recall on a similar scale to that of Toyota between 2009 and 2011 when it had to recall 9 million cars after some of its vehicles experienced unintended acceleration.