Rumors of VW chief's ouster

Germany's Tagesspiegel newspaper, citing unidentified sources on Volkswagen's supervisory board, reported Tuesday that VW CEO Martin Winterkorn would be fired and replaced by Matthias Müller, head of the automaker's Porsche sports car unit. But a VW spokesperson at corporate headquarters in Wolfsburg quickly denied the report, describing it as "ridiculous."

Shares in Europe's biggest carmaker plunged nearly 20 percent on Monday after it admitted using software in an onboard chip that allowed it to deceive US regulators measuring toxic emissions from some of its diesel motors. The stock fell another 20 percent to a four-year low on Tuesday, after the company said it would set aside 6.5 billion euros ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing up analysts' profit forecasts.

German Chancellor Angela Merkel on Tuesday called for a rapid and transparent probe into the emissions testing scandal.

"I hope the facts are quickly presented on the table," she said, adding that to her knowledge all necessary steps had been taken by the government to help investigate the scandal. Merkel did not comment on what impact the VW case might have on the German auto industry as a whole.

VW had warned the costs of the scandal could rise, saying diesel cars with Type EA 189 engines built into about 11 million Volkswagen autos worldwide over the past few years had shown a "noticeable deviation" in emissions levels between testing results and road-use results.

For comparison, VW sold 10.1 million cars in the whole of 2014.

The cost of recalling those cars and replacing components to bring their emissions within legal limits is far from the only financial liability the company has incurred with its scam. US Environmental Protection Agency (EPA) had said last that Volkswagen could face penalties up to $18 billion for having cheated on its diesel emissions tests.

The carmaker also faces the prospect of class-action lawsuits, and damage to the company's brand reputation could hit sales.

nz/hg (Reuters, dpa)