Michael Horn admits carmaker was dishonest with US regulators as France calls for Europe-wide inquiry into emissions-fixing scandal 
 
 The US chief executive of Volkswagen has said the company has “totally screwed up” over the emissions scandal that has rocked the automotive industry. 
 
 
 
 Michael Horn admitted at an event in Brooklyn, New York, on Monday night that VW had been dishonest with regulators and the public. 
 
 VW scandal: what the emissions revelations mean Read more 
 
 The world’s second-biggest carmaker could face a fine of up to $18bn (£11.6bn), criminal charges for its executives, and legal action from customers and shareholders due to US claims it used a defeat device to falsify emissions data. The device recognises when the car is being tested and immediately cuts emissions to a level that is much lower than normal and unsustainable under usual driving conditions. 
 
 Shares in Volkswagen fell by another 5% on Tuesday after losing almost a fifth of their value on Monday. 
 
 
 
 In further developments, France’s finance minister called for a “Europe-wide” investigation into diesel cars to “reassure” the public. 
 
 Michel Sapin told French radio: “This is not a minor subject, it’s not about speed or the quality of leather. What we are dealing with is making sure people avoid being poisoned by pollution.” 
 
 South Korea said on Tuesday it would investigate emissions of the VW Jetta and Gold models plus Audi A3 cars produced in 2014 and 2015. If problems are found, South Korea’s environment ministry said its inquiry could be expanded to all German diesel imports, which have surged in popularity in recent years in a market long dominated by local producers such as Hyundai. 
 
 VW scandal must change how we think about transport and the environment | Letters Read more 
 
 The US Congress also confirmed it is investigating the scandal. The House energy and commerce committee chairman, Fred Upton, and the oversight and investigations subcommittee chairman, Tim Murphy, announced that the oversight and investigations subcommittee will hold a hearing. 
 
 In addition, the US Department of Justice could conduct a criminal investigation into Volkswagen. 
 
 Horn, speaking at an event to launch a new version of the Passat sedan, which featured rock star Lenny Kravitz, said: “Our company was dishonest with the EPA, and the California air resources board and with all of you, and in my German words: we have totally screwed up. 
 
 “We must fix the cars to prevent this from ever happening again and we have to make this right. This kind of behaviour is totally inconsistent with our qualities. 
 
 “We are committed to do what must be done and to begin to restore your trust. We will pay what we have to pay.” 
 
 The comments from Horn are the first in public by a senior VW executive since the scandal emerged, although the company apologised on Sunday. He left the event without taking questions. 
 
 One of the officials involved in uncovering the alleged behaviour has told the Guardian that the emissions-fixing scandal could extend to other companies and countries. 
 
 Billions of pounds have been wiped off the value of global carmakers amid growing concerns that emissions tests may have been rigged across the industry. 
 
 
 
 “We need to ask the question, is this happening in other countries and is this happening at other manufacturers? Some part of our reaction is not even understanding what has happened exactly,” said John German, one of the two co-leads on the US team of the International Council for Clean Transportation (ICCT), the European-based NGO that raised the alarm. 
 
 The US Environmental Protection Agency (EPA) said on Friday that VW had installed illegal software to cheat emission tests, allowing its diesel cars to produce up to 40 times more pollution than allowed. The US government ordered VW to recall 482,000 VW and Audi cars produced since 2009. 
 
 
 
 In response, Martin Winterkorn, chief executive of VW, said in a statement on Sunday he was “deeply sorry” for breaking the trust of the public and ordered an external investigation. 
 
 A British expert in low-emission vehicles claimed the manipulation of air pollution data could be widespread and that tests in Europe are “much more open to this sort of abuse”. 
 
 
 
 Greg Archer, a former government adviser and head of clean vehicles at the respected Transport & Environment thinktank, said: “I am not surprised. There has been a lot of anecdotal evidence about carmakers using these defeat devices. All credit to the EPA for investigating and finding the truth.” 
 
 Archer, the former managing director of the UK’s Low Carbon Vehicle Partnership and non-executive director for the government’s Renewable Fuels Agency, said the scandal could spread into petrol cars and CO2 levels. “It is probably not limited to diesel and not limited to emissions,” he added. 
 
 The devices are thought to work by injecting more urea – an exhaust fluid – into the car when it is being tested. This limits nitrogen oxide emissions to a fraction of their usual level. The car detects it is being tested because devices such as the anti-collision systems have to be turned off when it is in the laboratory. The extra urea is not injected into the car when it is on the road because it would quickly run out. 
 
 Archer claims European tests are more open to abuse because they are conducted before the car goes into mass production and by companies that have been paid by the carmakers. These testing companies have been verified by regulators in each country, such as the Vehicle Certification Agency, but in the US the tests are conducted by an independent body. 
 
 
 
 Industry leaders in Britain claimed there was no evidence that manufacturers are cheating the system in Europe but admitted it needs to be reformed. 
 
 Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, the industry trade body, said: “The EU operates a fundamentally different system to the US – with all European tests performed in strict conditions as required by EU law and witnessed by a government-appointed independent approval agency. There is no evidence that manufacturers cheat the cycle. 
 
 “The industry acknowledges, however, that the current test method is outdated and is seeking agreement from the European commission for a new emissions test that embraces new testing technologies and is more representative of on-road conditions.” 
 
 The US allegations involve a series of diesel cars produced by VW and the brands it owns, such as Audi. These include the Audi A3, VW Jetta, Beetle, Golf and Passat models. VW has halted sales of these models. ||||| Image copyright Getty Images 
 
 The boss of Volkswagen's US business has admitted the firm was dishonest in using software to rig emissions tests. 
 
 Michael Horn said the firm was dishonest with US regulators, adding: "We have totally screwed up." 
 
 Last Friday, the regulators said VW diesel cars had much higher emissions than tests had suggested. 
 
 French Finance Minister Michel Sapin has called for an EU inquiry, but a UK car industry spokesman said there was "no evidence" of cheating. 
 
 Mike Hawes, who is chief executive of the UK's Society of Motor Manufacturers and Traders, said the EU operated a "fundamentally different system" from the US, with tests performed in strict conditions and witnessed by a government-appointed independent approval agency. 
 
 "There is no evidence that manufacturers cheat the cycle," he said. "Vehicles are removed from the production line randomly and must be standard production models, certified by the relevant authority - the UK body being the Vehicle Certification Agency, which is responsible to the Department for Transport." 
 
 However, he also described current testing methods as "outdated" and said the car industry wanted an updated emissions test, "more representative of on-road conditions". 
 
 Media playback is unsupported on your device Media caption Michael Horn, president and chief executive of Volkswagen Group of America: "Our company was dishonest... we have totally screwed up" 
 
 Fines looming 
 
 France's Mr Sapin said inquiries in Europe had to be conducted "at a European level". 
 
 "We are a European market with European rules," he told Europe 1 radio. "It is these that have to be respected. It is these that have been violated in the United States." 
 
 Elsewhere, the South Korean government said it would test up to 5,000 Jetta and Golf cars, along with Audi A3s made in 2014 and 2015. 
 
 Its investigation will be expanded to all German diesel cars if issues are found. 
 
 VW shares plunged nearly 20% on Monday after the US Environmental Protection Agency (EPA) found that software in several diesel cars could deceive regulators. 
 
 Volkswagen was ordered to recall half a million cars in the US on Friday. 
 
 In addition to paying for the recall, VW faces fines that could add up to billions of dollars. There may also be criminal charges for VW executives. 
 
 The White House in Washington also reportedly said it was "quite concerned" about VW's conduct. 
 
 Volkswagen scandal 11 million Vehicles affected worldwide €6.5bn Set aside by VW 
 
 $18bn Potential fines 
 
 No. 1 Global carmaker in sales 
 
 Analysis: Richard Westcott, Transport Correspondent 
 
 There's one question people keep asking me at the moment. Is this the car industry's version of Libor, the scandal that rocked the financial world? 
 
 It's way too early to say just yet. But the pressure is now on the car industry to prove that cheating the pollution figures isn't a widespread problem stretching across both sides of the Atlantic. 
 
 The German government is investigating whether other companies are massaging their emissions data. The American regulator is widening its probe to other carmakers. 
 
 If they dig up more examples, the implications could be huge. Fines running into billions. A complete loss of credibility. And worst of all, the possibility that people have become ill or even died early because of higher emissions. 
 
 Americans don't tend to buy diesels. They represent just 3% of their car market. But half of all new cars sold in Europe are a diesel. 
 
 Diesel cars: Is it time to switch to a cleaner fuel? 
 
 Chief apologises 
 
 Volkswagen chief executive Martin Winterkorn apologised after the scandal emerged and said he would "support" the German transport ministry's investigation into the carmaker. 
 
 He has launched an investigation into the software, which allowed VW cars to emit less during tests than they would while driving normally. 
 
 "We do not and will not tolerate violations of any kind of our internal rules or of the law," Mr Winterkorn said. 
 
 The EPA found the "defeat device", the device that allowed VW cars to emit less during tests than they would while driving normally, in diesel cars including the Audi A3 and the VW Jetta, Beetle, Golf and Passat models. 
 
 VW has stopped selling the relevant diesel models in the US, where diesel cars account for about a quarter of its sales. 
 
 'A very bad light' 
 
 The EPA said that the fine for each vehicle that did not comply with federal clean air rules would be up to $37,500 (£24,000). With 482,000 cars sold since 2008 involved in the allegations, it means the fines could reach $18bn. 
 
 That would be a considerable amount, even for the company that recently overtook Toyota to be the world's top-selling vehicle maker in the first six months of the year. Its stock market value is about €66bn ($75bn; £48bn). 
 
 VW has ordered an external investigation, although it has not revealed who will be conducting it. 
 
 "It's clearly putting German industry under a very bad light," former VW employee Arndt Ellinghorst, now head of global automotive research at Evercore ISI, told BBC News. 
 
 Mr Ellinghorst explained why it was so difficult to sell diesel cars in the US: "Carmakers have to comply with 31mg NOx (nitrogen oxide) emissions per km. In Europe, that's 80mg, so it's much easier to comply in Europe when you're selling a diesel vehicle compared to the US. 
 
 "It makes cars far more expensive, because carmakers have to add more technology." ||||| Regulators across the globe, including in India, South Korea and Germany, are conducting their own investigations, as are attorneys general in all 50 states. But the Justice Department has been seen as the only agency that might hold executives personally accountable. 
 
 “With today’s filing, we take an important step to protect public health by seeking to hold Volkswagen accountable for any unlawful air pollution, setting us on a path to resolution,” said Cynthia Giles, assistant administrator for the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance. “So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action.” 
 
 Related VW Coverage 
 
 Given the cascade of revelations, the civil complaint, which does not involve criminal charges or auto executives facing charges, is something of a blow to the Obama administration’s highly promoted new strategy for getting tough on corporate crime. The Justice Department has gained a reputation in recent years for forcing companies to pay big fines, while sparing the executives involved. In September, Deputy Attorney General Sally Q. Yates said that impression had weakened public confidence and vowed to change it. 
 
 “Corporations can only commit crimes through flesh-and-blood people,” Ms. Yates said as she announced the new policy, which encouraged prosecutors to set their sights on prosecuting corporate executives from the beginning of investigations. 
 
 Two weeks later, the Justice Department opened its investigation into Volkswagen. 
 
 The government is seeking an array of penalties against the company, including fines and further actions to mitigate the emission of harmful pollutants. The complaint does not specify actions the company must take to further reduce emissions, nor does it name a dollar figure for the penalty. Those will be decided by a federal court. 
 
 Under the Clean Air Act, the company could be fined up to $32,500 for each 2-liter diesel vehicle with the illegal software (about 499,000 autos) and up to $37,000 for each 3-liter vehicle with the software (about 85,000). Added together, the penalty could top $19 billion. 
 
 Volkswagen Timeline VW’s emissions cheating is said to have begun in 2005. 
 
 Justice Department officials said that the complaint represented the first step in legal action against Volkswagen and did not preclude a criminal charge or the targeting of specific executives. Environmental and public health advocates said the government should push forward with further charges. “The government should follow up with criminal charges against both VW and its management to protect our health from auto pollution and signal other automakers that it will throw the book at any company that follows VW’s lead,” Dan Becker, director of the safe-climate campaign at the Center for Auto Safety, wrote in an email. 
 
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 The decision to cheat was made a decade ago as the company began a major push to bring diesels to the United States, the chairman of the company’s supervisory board, Hans-Dieter Pötsch, acknowledged last month. The company’s technology was not sufficient to comply with emissions standards for smog-forming pollutants, particularly in the United States. 
 
 A pivotal episode came in 2006 and 2007, when Volkswagen initially decided to forge a partnership with BMW and Daimler to pursue technology to mitigate diesel emissions. After a management shake-up at Volkswagen in early 2007, the partnership was abandoned, and Volkswagen used its own technology. 
 
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 One key figure in the scandal is Wolfgang Hatz, who was promoted in early 2007 to lead engine and transmission development for Volkswagen. A few months after taking over, Mr. Hatz was filmed complaining about the expectations of the California Air Resources Board, which at the time was proposing sharp new limits on global warming gases released by automobiles. 
 
 “We can do quite a bit, and we will do a bit, but ‘impossible’ we cannot do,” Mr. Hatz said at the time. “From my point of view, the C.A.R.B. is not realistic,” he said of the air resources board. Mr. Hatz was suspended. 
 
 Hundreds of Volkswagen owners and California municipal districts have filed a collective suit against the company in Federal District Court for the Northern District of California. The Justice Department will next seek to transfer its case to the California court, joining that multidistrict litigation. The case will be heard by Judge Charles Breyer, brother of the Supreme Court justice Stephen Breyer.
– After rigging emissions tests to fool regulators, Volkswagen appears to have belatedly decided that honesty is the best policy. Michael Horn, the chief of the German automaker's US business, told an audience at an event in New York last night that the company had cheated, the BBC reports. "Our company was dishonest with the EPA, and the California air resources board and with all of you, and in my German words: We have totally screwed up," he said, promising that the company would "make this right" and "will pay what we have to pay." The company will face around $18 billion in fines in the US alone, and countries such as South Korea are now also investigating emissions from Volkswagen's diesel vehicles, the AP reports. Volkswagen may be punished with more than fines: Sources tell Bloomberg that the Justice Department—which recently launched a push to go after individuals as well as corporations in cases of corporate wrongdoing—is considering criminal proceedings, which could involve executives in both Germany and the US. The scandal has already wiped more than $16 billion off Volkswagen's share price and the fallout could just be beginning. Experts tell the Guardian that the use of software to cheat emissions tests could be widespread in other countries and with other manufacturers. (Some 500,000 diesel Volkswagen vehicles in the US have been recalled, and Consumer Reports has yanked its favorable ratings.)