VW scandal: Volkswagen suspends more employees as board names Mueller as CEO - as it happened

21.17

That's all folks

Another day of turmoil for VW. It's shares dropped 4.3pc but it appointed a new chief executive, Matthias Mueller. The former Porsche boss pledged to win back customers' trust.

“My most urgent task is to win back trust for the Volkswagen Group by leaving no stone unturned and with maximum transparency, as well as drawing the right conclusions from the current situation,” he said.

However, despite confirming that 5m cars had been affected, down from the 11m initially feared things got worse for VW.

Executives at VW were accused of masterminding the emissions scandal from the company’s headquarters in Wolfsburg.

The chain of command of those involved in the rigging deception stretched all the way back from the US to VW’s home patch, it was claimed, with executives in Germany controlling the key aspects of tests which the firm now admits were manipulated.

For the latest news on VW, click here.

19.34

5m cars affected, says VW

Volkswagen's internal evaluation has found 5m cars were affected by the scandal. The group said on Tuesday that 11m vehicles worldwide were fitted with the software that allowed it to cheat US emissions tests, but it was not turned on in the bulk of them.

18.54

Swiss cheesed off

Switzerland is seeking a temporary sales ban on all the VW cars affected by the emissions scandal

17.49

Board shake-up

VW says board member for sales, Christian Klingler, has left the group under a restructuring. Jürgen Stackmann, Chairman, Executive Committee SEAT, will replace him. VW says Klingler's departure is not related to recent events.

Winfried Vahland, CEO and chairman of Skoda, will lead VW's activities in North America.

17.47

ECB piles on the pressure

THe European Central Bank has suspended purchases of asset-backed securities backed by VW loans, according to Reuters.

17.46

"Small group of people"

VW says a small group of people in the company caused the crisis, and it needs a new corporate culture.

New CEO Mueller says that the safety of vehicles or customers were not put at risk as a result of the crisis.

17.37

More on Mueller

Mueller will remain CEO of Porsche until a successor is found. VW says scandal is a "moral and political disaster", and calls extraordinary shareholder meeting for November 9.

VW also announces that it has suspended some employees.

Mueller says his most urgent task is to win back trust, as the company faces "unprecedented challenges". VW will do its utmost to win back trust "step by step".

17.36

... It is now!

VW officially names Matthias Mueller as new CEO with immediate effect.

17.14

They think it's all over...

The VW meeting is over and Matthias Muller has been elected CEO, according to German website Handelsblatt.

16.49

VW shares slump

Volkswagen stocks close down 4.32pc at €115.30. That's a 34pc drop from a week ago.

16:07

VW press conference imminent

The press is gathering at VW HQ. Announcement shortly...

15:52

The wait for a new VW boss goes on...

15:13

EPA to overhaul emissions tests in the US

The US is waking up and the Environmental Protection Agency there has something to say.

It's just announced in a call with journalists it will shake up the way it tests diesel cars for emissions following the revelations around VW.

The EPA is sending a letter to all carmakers today letting them know it may test their vehicles in real-world conditions. This is a departure from its current protocol, which involves lab testing.

It's significant because VW was caught out in part because its diesel cars were found to emit much higher emissions when tested on the road.

VW's smaller diesel cars will also require engineering changes.

"We must continue to improve oversight," the agency says.

14:30

VW execs in Germany controlled "key aspects" of emissions testing

We have unconfirmed reports from Bloomberg that Volkswagen executives in Germany controlled the key aspects of emissions tests whose results the carmaker now admits were faked.

Bloomberg cites three people "familiar with the situation", saying:

"The criteria, outcomes and engineering of cars that missed emissions targets were overseen by managers at Volkswagen’s base in Wolfsburg..

"Their accounts show the chain of command and those involved in the deception stretched to Volkswagen headquarters.

"If any vehicle failed to meet emissions targets, a team of engineers from Volkswagen headquarters or luxury brand Audi’s base in Ingolstadt was flown in.

"After the group had tinkered with the vehicle for about a week, the car would then pass the test. VW had no engineers in the US able to create the mechanism that cheated on the test or who could fix emissions problems."

Shares in VW have fallen as much as 5pc today.

14:16

New CEO faces uphill battle

Reuters reports this:

A top 20 shareholder in VW says Winterkorn left too soon as new boss will have to take the flak for past mistakes

"His departure was inevitable but I do think that he should have taken a little more of the heat a little bit longer," the person said.

"Now the new CEO will be forced to absorb a lot of the criticism for what happened before his arrival, and for the future bad news that will undoubtedly come ... I think it will be very tough for that person to make a fresh start."

14:07

Emissions rigging extends to smaller cars as Germany says tampering was "illegal"

Germany's transport minister Alexander Dobrindt is speaking in Berlin:

"Volkswagen tampering was undoubtedly illgeal," he says.

He said VW's job was to restore trust and transparency and said VW has pledge full cooperation with Germany probe.

About 2.8 million vehicles in Germany are affected, including the smaller 1.2 litre engine cars.

Germany has also demanded a binding timetable for VW technical redress.

Shares in VW have slumped 4pc

13:31

Remind me, what does all this mean if I have one of these cars?

The Environmental Protection Agency in the US has ordered that Volkswagen recalls affected diesel cars to modify them, and the same is likely to follow in Europe.

Volkswagen will get in touch with you if your car has to be returned, and it will perform the repairs free of charge.

It looks likely that the necessary software update will leave Volkswagen drivers with a car that doesn't perform as they were told it would when they bought it.

Consequently, drivers will potentially face much higher fuel bills in order to remain compliant with emissions standards.

But if there is a recall and your car is not updated, the resale value of your vehicle could take a hit, and you could invalidate your insurance.

This guide should answer more of your questions around the VW scandal.

And here's a list of all the cars affected.

13:08

Spanish asset manager slashes VW stake

Spanish asset manager Bestinver reduced its Volkswagen position from 4.5pc of its international portfolio at the end of August to 2.3pc following VW diesel emissions-test scandal in the US, reports Bloomberg.

According to the reports, Bestinver said VW may present attractive valuations, but even so, reducing the position was a prudent decision.

It follows yesterday's move by Scandinavian bank Nordea barring its traders from buying Volkswagen shares and bonds for six months because VW's actions had been "unacceptable".

13:00

VW board meeting taking longer than expected - discussing new corporate structure

Until now nothing has leaked from the VW boardroom.

Sources have told Reuters that Volkswagen's supervisory board is discussing a new corporate structure, in addition to choosing a new chief executive to replace Martin Winterkorn, who resigned this week, citing three people familiar with the matter.

Two of the sources said the meeting was taking longer than expected.

12:45

Italy moves up a gear

As we await the appointment of the new boss of disgraced car giant VW, Italian prosecutors in Turin have announced they are conducting a preliminary review into VW over the emissions-rigging scandal that has threatened to topple the German automaker.

12:33

Daimler denies emissions cheat

As the crisis engulfing VW grows bigger, the prospect that other car manufacturers might have been using the same emissions-rigging software in their vehicles has prompted many auto makers to defend their positions.

BMW has already said it didn't use the cheat devices, with Daimler the latest to announce that it did not manipulate emissions data in diesel engines, according to reports from Reuters.

Daimler denied allegations by lobby group Deutsche Umwelthilfe (DUH) that it had rigged emissions data for its vehicles.

"We sharply deny the allegation that we manipulated our cars during emissions tests. We never did and do not now use a defeat device," Daimler said in a statement.

It said it was unaware of any data showing its vehicles breached legal limits and said it was willing to have any of its vehicles tested.

12:31

UK to run special vehicle lab tests

The UK's Vehicle Certification Agency will rerun some lab tests and compare results against “real-world” driving emissions, the BBC reports, citing Transport Secretary Patrick McLoughlin.

The Vehicle Certification Agency is working with manufacturers “to ensure that this issue is not industry wide,” Mr McLoughlin said

11:20

Winterkorn leaves Porsche

We have reports that Volkswagen's former chief executive Martin Winterkorn is also to step down from his post as board chairman of the group's luxury sports carmaker Porsche.

He is is unlikely to retain any leading position in the group, company officials have told German news agencies.

11:16

Norway steps in and France steps up

Norway's economic crime unit has opened an investigation into VW.

Meanwhile, the French authorities are planning to randomly test 100 cars and are setting up an independent body to evaluate tests.

France has also asked the EU Commission for new emissions testing rules to be brought in by the end of the year.

11:00

Minister demands compensation for German VW owners

More from our man in Berlin: Justice minister in the German state of North Rhine-Westphalia has said it is not right that only US VW drivers are likely to get compensation from VW and demanded German motorists affected by the scandal be paid compensation as well.

10:30

VW boardmembers "not happy" as Winterkorn clings to power

Former VW CEO Martin Winterkorn wants to cling on as head of holding company, reports our man in Berlin.

German press are reporting that Winterkorn is trying to stay on as CEO of Porsche Automobil Holding, which owns 50.7pc of VW shares.

Board members are understood to be "not happy"

10:16

Australia joins the pack

The Australian government just announced it was seeking urgent clarification from Volkswagen over whether cars in the country are involved in a growing global scandal over rigged emission results.

"I expect advice from Volkswagen and Audi shortly and the government would then determine whether and what further action was required," Territories, Local Government and Major Projects Minister Paul Fletcher said in a statement.

10:15

South Africa opens inquiry

Another country to add to our list of those investigating VW: South Africa has opened a probe. From AFP:

The South African government will investigate whether Volkswagen AG vehicles in the country are affected by the automaker’s admission that it cheated on emissions testing for diesel engines.

The National Regulator for Compulsory Specifications, a unit of the Department of Trade and Industry, will work with the environmental affairs and transport ministries to assess vehicles’ compliance with emissions regulations, the NRCS said.

10:05

VW fallout from the insurer's point of view

“In this instance, manipulating the software is likely to expose VW to criminal sanctions and fines," says Jim Sherwood, partner at insurance law specialist BLM.

"Volkswagen is clearly responsible for this fault, however, the technology being developed is now so sophisticated that identifying responsibility for software malfunctions is a major forensic challenge.

"Liability is now moving away from the driver and towards the software developers, servicers and the manufacturers and importers of the cars themselves. In terms of product liability, defining where responsibility lies is critical, and the insurance industry must make this top of their agenda.”

09:46

Volkswagen to be subpoenaed by US authorities

It's getting worse for VW, Bloomberg reports that 27 US states have begun a joint investigation of Volkswagen and are about to send subpoenas to the company - these are essentially writs compelling testimony or evidence to be produced or face a penalty - according to a spokeswoman for the Illinois Attorney General.

The states will pursue the investigation under consumer-protection and environmental laws and determine whether the deceptive trade practices were used to convince consumers their cars were environmentally friendly, when in fact they weren't.

This is in addition to a separate investigation by the US Justice Department and Environmental Protection Agency.

09:33

Indian authorities launch probe

AFP reports that India has become the latest country to order an investigation into Volkswagen over rigged emissions tests.

Indian business newspaper Mint reported today that India's government had instructed top vehicle testing agency, Automotive Research Association of India (ARAI), to inspect Volkswagen cars.

ARAI will determine if the cars sold in India were the same as those in the United States and whether they were equipped with the same software that helped rig the emission tests, said Mint.

If you're new to the scandal, here's what's happened in a nutshell:

• the car manufacturer admitted that 11 million of its diesel cars are equipped with devices that can cheat pollution tests, wiping billions of dollars off the company's market value this week

• VW's chief executive has stepped down and three more senior level managers are expected to be dismissed at a meeting today alongside the appointment of a new CEO

• VW now faces the prospect of billions of pounds worth of financial penalties from regulators around the world as well as a string of lawsuits for faking emissions tests

09:18

Good morning and welcome to our rolling coverage of the fallout from the VW emissions cheating scandal.

Today we're widely expected to hear who the board of VW has appointed to replace CEO Martin Winterkorn, who resigned on Wednesday.

We'll also be following developments around the world, with regulators calling for action on emissions tests and other car manufacturers wondering whether they will be dragged into the scandal.