The U.S. Environmental Protection Agency said on Friday Europe's biggest carmaker used software for diesel VW and Audi branded cars that deceived regulators measuring toxic emissions and could face penalties of up to USD 18 billion.
Germany's Economy Minister Sigmar Gabriel expressed concern over the impact of what he called 'a bad case' on the country's vital auto industry and he urged Volkswagen to fully clear up the allegations.
"You will understand that we are worried that the justifiably excellent reputation of the German car industry and in particular that of Volkswagen suffers," Gabriel said.
"This disaster is beyond all expectations," said Ferdinand Dudenhoeffer, head of the Center of Automotive Research at the University of Duisburg-Essen.
Analysts said it was unclear whether other automakers had also broken rules or what the ultimate cost could be for VW. German rivals Daimler and BMW said the accusations made by U.S. authorities against VW did not apply to them.
However, industry experts predicted the scandal would hit VW hard, just as it was hoping to move on from a damaging leadership battle, with a supervisory board meeting on Friday
due to discuss a new company structure and management line-up.
A source close to Volkswagen said any decision on emissions control mechanisms would have been taken at the group's Wolfsburg headquarters and not by regional divisions.


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