Millions of cars could be recalled worldwide over a scandal engulfing Volkswagen, after it admitted cheating diesel vehicle emissions tests in the USA.
The German company's US head apologised last night after the US Environmental Protection Agency (EPA) revealed that the world's biggest carmaker by sales used software that deceived regulators measuring toxic emissions last Friday.
VW shares plunged by 19 per cent yesterday after the EPA said the firm could face penalties of up to $18bn (£12bn) and ordered it to recall nearly half a million diesel models built in the last seven years.
The agency said cars had been fitted with sophisticated software known as a 'defeat device' that detects when the vehicle is undergoing official emissions testing, and turns full emissions controls on only during the test. Once on the road, the cars produced nitrogen oxide pollutants at levels said to be up to 40 times the legal standard.
The allegations cover nearly half a million cars from VW and Audi-branded diesel models including the Audi A3, VW Jetta, Beetle, Golf and Passat and sales of affected cars have already been suspended in the US and Canada.
VW's US CEO Michael Horn admitted the company had "totally screwed up" and vowed to make amends at an event in New York to promote the 2016 VW Passat. His presentation did not highlight the environmental efficiency of the Passat's 'clean diesel' model, focusing instead on the vehicle's new sensor technology to assist with parking and avoiding accidents.
The US government announced it was widening the investigation to other manufacturers. Media reports said the US Department of Justice has started a criminal probe into the allegations, while South Korea said today it would investigate three of the maker's diesel models.
The European Commission is in contact with VW and US regulators, though it said it is too early to say whether VW vehicles in Europe were also affected, but campaign group Transport & Environment (T&E) said the scandal will inevitably end up in Europe.
Greg Archer, T&E's clean vehicles manager, told the Daily Telegraph the technology used in the VW cars, in the form of devices that allowed its diesel cars to release fewer pollutants during tests than in real-world driving conditions, was also used by other car makers.
"The Volkswagen example is clearly just the tip of the iceberg and there will be a lot more companies dragged into this.," he said. "Exactly the same technology is used in Europe as it is in the US, and tens of millions of cars have been sold since 2009.
"That mean that there are potentially millions of cars that are being driven illegally. Obviously it is not the drivers' fault, but it is likely we will see a huge number of recalls."
German rivals Daimler and BMW have said the accusations against VW did not apply to them and German Economy Minister Sigmar Gabriel has expressed concern that the scandal could damage "the justifiably excellent reputation of the German car industry".
VW chief executive Martin Winterkorn said: "I personally am deeply sorry that we have broken the trust of our customers and the public.
"We will co-operate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter. We do not and will not tolerate violations of any kind of our internal rules or of the law."