The company then admitted that it intentionally installed software programmed to switch engines to a cleaner mode during official emissions testing. The software then switches off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit.
In its statement Tuesday, Volkswagen gave more details, admitting that "discrepancies" related to vehicles with Type EA 189 engines and involved some 11 million vehicles worldwide.
"A noticeable deviation between bench test results and actual road use was established solely for this type of engine," it said. "Volkswagen is working intensely to eliminate these deviations through technical measures."
To cover the necessary service measures and what it says are "other efforts to win back the trust of our customers," VW said is setting aside some 6.5 billion euros in the current quarter.
That figure, it conceded, may be subject to revaluation in the light of ongoing investigations. As a result, it said 2015 earnings targets will be adjusted but didn't specify by how much.
It added that the software is also installed in other vehicles with diesel engines but that that for the "majority of these engines the software does not have any effect."
VW's are not confined to the U.S., though.
South Korea said Tuesday it would investigate emission levels of Volkswagen diesel vehicles in the wake of the rigging scandal in the U.S. that's heaped pressure on CEO Martin Winterkorn. The German government is to also conduct new emissions tests in VW's diesel cars, while France called for a wider Europe-wide investigation into Volkswagen's practices - and into those of French carmakers.