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The Volkswagen power plant is seen from the railway station in Wolfsburg, Germany September 22, 2015. Martin Winterkorn's days as head of Volkswagen AG appeared numbered on Tuesday after the German carmaker said a scandal over falsified vehicle emission tests in the United States could affect 11 million of its cars worldwide. Shares in Europe's biggest carmaker plunged almost 20 percent on Monday after it admitted using software that deceived U.S. regulators measuring toxic emissions in some of its diesel cars. REUTERS/Axel Schmidt

The Volkswagen emission testing scandal could have affected as many as 11 million vehicles, according to the German auto giant. It has added on Tuesday that it will make a provision of US$7.3 billion (AU$10.37 billion) to make up for the costs of the scandal in its third quarter, but the amount is subject to revaluation.

In a formal statement issued on Tuesday, the company said that it is working to clarify the irregularities and that the new vehicles from the group with EU 6 diesel engines abide by the legal and environmental standards.

Martin Winterkorn, Volkswagen chief executive, has also issued a formal sentence in behalf of the company, saying he is “endlessly sorry” for the emission testing scandal.

The Department of Transport in U.K., on the other hand, called for a nation-wide investigation into the incident. Volkswagen shares were almost down 20 percent on Tuesday in Frankfurt following the scandal.

The Environment Protection Agency discovered a software, which was being used by the company’s diesel cars, capable of misleading emission testing. This led the U.S. government to call on the company to withdraw almost half a million vehicles and put a fine of US$18 billion (AU$25.03 billion) on the company.

It is being feared that the VW scandal, which is reportedly the biggest in its 78-year history, will not limit the damage to the automaker alone. Germany’s long standing reputation for reliability, trustworthiness and efficiency could also be at risk.

The U.S. Justice Department has also launched a criminal investigation into the matter. The investigations will include a probe into a possible violation of the Clean Air Act as well as other broader statutes.

No company should be allowed to evade our environmental laws or promise consumers a fake bill of goods," New York Attorney General Eric Schneiderman said in a statement.

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