Shares in the company have fallen by almost a fifth as investors responded to US accusations that the carmaker falsified emissions data.
The manufacturer is facing fines of $18 billion after it accepted that it systematically installed software to deceive emissions test results.
The German economy minister, Sigmar Gabriel said: “You will understand that we are worried that the justifiably excellent reputation of the German car industry and in particular that of Volkswagen suffers.”
The scandal emerged after the Environment Protection Agency (EPA) accused VW of installing illegal software that dramatically reduces nitrogen oxide (NOx) emissions when the cars undergo strict emissions tests.
Cynthia Giles, an EPA enforcement officer said: “Put simply, these cars contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test.”
The EPA has accused VW of using the ‘defeat device’ in 482,000 four-cylinder VW and Audi diesel cars in the US since 2008.
Volkswagen’s chief executive apologised after the scandal emerged and said: “I personally am deeply sorry that we have broken the trust of our customers and the public.”
In response to fears that the issue could affect UK consumers, the Society of Motor Manufacturers and Traders (SMMT) has said that cars sold in the UK “must complete a standard emissions test, which, unlike in the US, is independently witnessed by a government-appointed independent agency.”
The SMMT added: “On the separate on-going debate about real world testing, industry accepts that the current test method for cars is out of date and is seeking agreement from the European Commission for a new emissions test that embraces new testing technologies and which is more representative of on-road conditions.”
The repercussions are likely to reach far and wide, it will be interesting to see what investigations will uncover – share your concerns in the comments below.