Volkswagen says it will recall around 8.5 million diesel cars in the European Union which have manipulated engines, beginning in January.
The move comes after the German authorities ordered VW to recall and refit 2.4 million diesel vehicles early next year because of rigged emissions tests.
Meanwhile Italian finance police have reportedly raided VW’s Italian HQ and its Lamborghini offices as part of a criminal inquiry into commercial fraud related to the scandal.
According to the newspaper Bild, the possibility that German car owners could bring their vehicles in voluntarily for refitting was rejected by the authorities.
“The KBA (the car watchdog) believes this to be a case of software using an illegal defeat device. VW must now remove the corresponding software from all vehicles and take the necessary steps to ensure compliance with emission regulations,” said the German Transport Minister, Alexander Dobrindt.
The minister stressed the affected vehicles were safe and could be driven as normal.
The government says it doesn’t know who was responsible for creating and installing the software.
But reports say Volkswagen has suspended the head of its main transmissions plant as it investigates the matter. Falko Rudolph oversaw the development of diesel engines in the late 2000s. Three other top engineers had already been suspended.
Some analysts estimate the refits plus fines and lawsuits could cost Volkswagen as much as 35 billion euros.
Germany’s environment minister has added that the government should think about ending tax breaks for diesel cars and promoting electric ones.
Volkswagen’s new CEO, Matthias Mueller, said on Thursday that Volkswagen could bounce back from the scandal and had a “good chance of shining again in two to three years”.