Three top Volkswagen executives are to be fired following the scandal over emission rigging practices, according to a senior source.
Chief executive Martin Winterkorn has already left his post following the revelations, but the source said the head of the company's US operations, Michael Horn, and top engineers at premium VW brands Audi and Porsche would be dismissed as well, regardless of whether they knew about the cheating.
Earlier in the week Horn acknowledged that VW had "totally screwed up" in its attempts to deceive US regulators.
The company fell into disrepute after it emerged that it was installing a 'defeat device' in its vehicles which detects when the car is being tested and initiates an action designed to reduce emissions for the time of the testing.
It can switch the engine to economy mode or even inject chemicals to cut emissions to comply with legal limits. It has been said real emissions could be up to 40 times higher.
To further complicate matters, German transport minister Alexander Dobrindt said that Volkswagen has admitted using the same fake emissions test in Europe as it used to falsify results in the US.
"We have been informed that also in Europe, vehicles with 1.6 and 2.0 litre diesel engines are affected by the manipulations that are being talked about," he said.
Dobrindt said Europe would agree new emissions tests in the coming months that should take place on roads, rather than in laboratories, and that random checks would be made on all manufacturers.
VW is under pressure to act decisively, with its shares plummeting by up to 40 per cent since the crisis began. German chancellor Angela Merkel has urged the vehicle manufacturer to quickly restore investor confidence in a company that has been long regarded as a mainstay in the German engineering sector.
Volkswagen board member Olaf Lies told the Bavarian broadcasting network: "There will be further personnel consequences in the next days and we are calling for those consequences."
VW said on Tuesday about 11 million of its cars worldwide were fitted with the software that was found to be cheating emissions in the United States. The US Environmental Protection Agency has said Volkswagen could face penalties up to a staggering $18bn (£12bn) for the deception.
The scandal has reportedly sent shockwaves through the car market, with manufacturers fearing a drop in demand for diesel cars.
Customers have also voiced concern over a potential falls in the re-sale value of their vehicles.