VW Emissions Scandal: UK Begins Investigation

The UK Government is to re-test cars to compare their lab results with real-world driving emissions following the Volkswagen (Other OTC: VLKAF - news) scandal.

Transport Secretary Patrick McLoughlin's announcement comes hours after Germany claimed that VW had manipulated emissions tests in Europe as well as the US.

Mr McLoughlin confirmed the Vehicle Certification Agency is working with manufacturers "to ensure this issue is not industry wide".

He also called on the EU to conduct a Europe-wide investigation into whether there is evidence that cars in the UK have been fitted with "defeat devices".

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The software switches engines to a cleaner mode during official testing - falsely giving the impression that vehicles meet the environmental standards for diesel cars.

He added: "The Government takes the unacceptable actions of VW extremely seriously.

"My priority is to protect the public as we go through the process of investigating what went wrong and what we can do to stop it happening again in the future."

At least 482,000 cars are to be recalled in the US and the carmaker could face penalties of more than $18bn (£11bn) there alone.

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According to Volkswagen, 11 million vehicles worldwide have been fitted with defeat devices - and the number of affected cars currently on Europe's roads "will be cleared up in the next few days".

On Wednesday, Martin Winterkorn quit as VW's chief executive and accepted responsibility for "irregularities found in diesel engines". However, he stressed he had not been aware of any wrongdoing.

His successor will likely be Matthias Mueller, the 62-year-old boss of Porsche, Reuters reported.

It (Other OTC: ITGL - news) also reported the research and development bosses of Audi (Other OTC: AUDVF - news) and Porsche and its top manager in the US will be dismissed.

Crisis management expert Quentin Langley told Sky News the scandal is "one of the biggest corporate scandals we have ever seen".

He said: "I think it is bigger than BP with the Gulf of Mexico, bigger than the banking crisis because this was deliberate."

It has been warned the scandal could lead to Britain's biggest ever class action lawsuit.

Jacqueline Young, head of group litigation at Slater & Gordon, told Sky News: "Consumers have probably paid a premium for buying a diesel car - they've made a choice, they want a diesel car because it's fuel economic and because of the green footprint.

"They've obviously been sold something that's not what it seems, so they've paid a premium and now their asset has devalued."

Ms Young added that legal action by shareholders may be possible, while VW motor dealers may also seek compensation because of how the product has been misrepresented to them, and subsequently mis-sold to shoppers (Other OTC: UBGXF - news) .