VW hit by fraud and emissions crisis

German carmaker loses boss and faces criminal proceedings over test-defeating engine management devices.

The European auto-giant is set to recall as many as 11 million vehicles after US regulators revealed that the company had fitted vehicles with software to provide false readings during nitrogen oxide emissions tests for its diesel models fitted with EA 189 EU5 engines.

The software was allegedly programmed to recognise when a vehicle was connected to test equipment, thus providing different emissions results from those achieved under normal driving conditions - apparently as high as 40 times over legal US limits.

Yet, perhaps surprisingly, this is not the first time VW and other manufacturers have been caught out using this type of technology. As early as 1974, the company had been fined by the EPA for a similar breach of regulations, with GM Cadillac, Ford and Honda also agreeing multi-million dollar settlements in the 1990s for 'defeat device' issues.

In the immediate aftermath of the recent revelations, VW CEO Martin Winterkorn resigned and was quickly replaced by the boss of VW subsidiary, Porsche, Matthias Mueller. However, following the initial revelations by the US Environmental Protection Agency (EPA the extent of the alleged fraud has expanded dramatically to also include vehicles in Europe.

Although the EPAs findings covered around 500,000 cars in the US, the 'defeat devices' could have been fitted to as many as 11 million cars including the VW Golf, Passat and Beetle as well as the VW- manufactured Audi A3 and SEAT and Skoda models.

As well as issuing the video apology and accepting it is set to undergo one of the largest vehicle recalls in automotive history, VW admitted it is likely to face criminal charges over the allegations, with Winterkorn already being investigate for fraud by German authorities.