VW said the financial risks stemming from the finding are about €2 billion ($2.2 billion). The risks may come from compensation claims from consumers who say they bought their car under false pretences and from possible affects from CO2-based taxation regimes.

Automotive News reports that the models affected are VW, Seat and Skoda vehicles that use 1.4-, 1.6- and 2.0-litre diesels built in 2012 and later. These so far include VW Golf, Polo, Passat, Audi A1 and A3, Seat Ibiza and Skoda Octavia models. VW's 1.4-litre ACT gasoline engine in the Polo that has cylinder on demand technology is also affected.It also reports that fuel efficiency deviations were in some cases between 10% and 15%.

The issue of potentially false CO2 levels mainly affects Europe, the biggest market for diesel cars, where a model's carbon emissions are always communicated to consumers. Such practices are not as common in markets such as the US where often only fuel efficiency and mileage are provided.

"VW's top management will immediately start a dialogue with responsible authorities regarding the consequences of these findings," the carmaker said in the statement yesterday. "This should lead to a reliable assessment of the legal, and the subsequent economic consequences of this not yet fully explained issue."

Matthias Müller, CEO of Volkswagen (pictured above) stressed:  “From the very start I have pushed hard for the relentless and comprehensive clarification of events. We will stop at nothing and nobody. This is a painful process, but it is our only alternative. For us, the only thing that counts is the truth.”

He added. “The board of management of Volkswagen AG deeply regrets this situation and wishes to underscore its determination to systematically continue along the present path of clarification and transparency.

“In cooperation with the responsible authorities, Volkswagen will do everything in its power to clarify the further course of action as quickly as possible and ensure the correct CO2 classification for the vehicles affected. “

The biggest business crisis in VW's 78-year history has wiped as much as a third off its stock market value, forced out long-time CEO Martin Winterkorn and rocked the auto industry, a key employer and source of export income in Germany.

Colin Tourick, co-founder of International Auto Finance Network and founder of Colin Tourick & Associates said: "This is the first revelation that could substantially dent VW's fleet sales. If company car drivers think that VW's CO2 emission figures are understated it might make them opt for another manufacturer when choosing their next company car. VW needs to clarify this issue rapidly to avoid any damage to sales".



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