Spotlight: VW Group CEO quits amid emissions scandal, shockwave to continue

CEO of Volkswagen Group Martin Winterkorn on Wednesday announced his resignation as the company is caught in an emissions scandal.

Winterkorn made the announcement in a statement published on the website of the company.

Winterkorn said he accepted responsibility for the "irregularities" that had been found in diesel engines and have requested the supervisory board to agree to his resignation as CEO the the VW Group.

"I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part."

"The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis," said the statement.

The executive committee of Volkswagen AG's supervisory board said in a statement published on its website that it has great respect for Winterkorn's offer to resign his position and to ask that his employment agreement be terminated.

Recommendations for new personnel will be presented at the upcoming meeting of the supervisory board this Friday, it said.

While paying tribute to Winterkorn's "invaluable contributions" to Volkswagen, the executive committee said in the statement that Winterkorn had no knowledge of the manipulation of emissions data.

They expect further personnel consequences in the next few days. "The internal Group investigations are continuing at a high tempo."

With regard to the emissions cheating accusations, the executive committee said it takes this matter extremely seriously.

"The executive committee recognizes not only the economic damage caused, but also the loss of trust among many customers worldwide," said the committee.

According to the statement, the "incidents" need to be clarified with great conviction and "mistakes are corrected".

Under mounting pressure, Winterkorn said earlier he was sorry for the emissions cheating issue but refused to step down as the chief of VW Group.

Winterkorn, 68, joined AUDI AG as an assistant to the member of the board for quality assurance, according to an introduction on VW's webpages. He became chairman of the board of management of VW AG on Jan. 1, 2007. He was responsible for research and development in the company.

In a showdown with Winterkorn, Ferdinand Piech resigned as chairman of VW's supervisory board in April. A six-member panel of the steering committee of the supervisory board said the trust with Piech was gone. Local analysts said Winterkorn's contract, which expired in 2016, could be extended.

"I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group," said Winterkorn in the statement.

The German carmaker Volkswagen (VW) on Tuesday revealed that a total of 11 million diesel cars may have been involved in the emissions cheating scandal. It set aside 6.5 billion euros (7.3 billion U.S. dollars) to cover the costs of the issue.

After plunging 18.6 percent on Monday, VW's stocks slipped by 19.82 percent on Tuesday largely due to the emissions cheating scandal. The decline actually started in March after it reached a high level of 262 euros per share. The market value of the company has shrunk by more than 50 percent since then.

The U.S. Environmental Protection Agency (EPA) found the software on VW diesel cars showed false emission data. The software installed by Volkswagen in its cars had violated the Clean Air Act, the U.S. Environmental Protection Agency said in a statement on Friday.

According to the EPA findings, the software called "defeat device" can turn on full emission controls only when the car is undergoing emission tests to make the car meet the legal emission standards, but during normal driving, the car will emit nitrogen oxides at up to 40 times the standard.

"Using a defeat device in cars to evade clean air standards is illegal and a threat to public health," said Cynthia Giles, EPA's assistant administrator for the Office of Enforcement and Compliance Assurance.

The allegations cover roughly 482,000 diesel passenger cars sold in the United States by Volkswagen AG, Audi AG, and Volkswagen Group of America since 2008. The models include Jetta, Beetle, Golf, Passat and Audi A3.

The EPA also said "Volkswagen may be liable for civil penalties", which means the German car maker could face charges of up to 37,500 dollars per vehicle, the maximum fine for violating the U.S. Clean Air Act, or a total of more than 18 billion dollars.

"The board of management at Volkswagen AG takes these findings very seriously. I, personally, am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case," Winterkorn said in a statement on Sunday.

The scandal sent a shockwave through the auto industry in Germany.

Bosch, which supplies diesel engine components to manufacturers, was also under question. In a statement made earlier, Bosch admitted it had delivered components for regulating diesel exhaust systems to Volkswagen. Bosch supplies components for exhaust after-treatment to several manufacturers.

However, it said in a statement that the integration was the responsibility of the manufacturer.

Other auto manufacturers in Germany, including Daimler AG and BMW AG St, also witnessed significant losses of their share prices. On Wednesday, Volkswagen AG Vz, Daimler AG and BMW AG were the most traded shares on the German stock exchange index, DAX.

German Chancellor Angela Merkel on Tuesday asked VW to show full transparency on the matter.

"Given the current difficult situation, this is about showing full transparency and clear up the entire process," said Merkel, responding to a question of whether she feared the scandal would hurt the positive image of German auto industry.

Merkel said the German transport minister was in close contact with Volkswagen, and she hoped to see "the facts on the table as quickly as possible". Endit