Volkswagen CEO Martin Winterkorn resigns amid Diesel Emissions Scandal

Kuala Lumpur: Volkswagen CEO Martin Winterkorn resigned on Wednesday, taking responsibility for the German carmaker's rigging of U.S. emissions tests in the biggest scandal in its 78-year history.

"Volkswagen needs a fresh start - also in terms of personnel. I am clearing the way for this fresh start with my resignation," Winterkorn said in a statement.

Winterkorn said on Wednesday he took full responsibility for the scandal, in which the company admitted that 11 million cars were installed with a defeat device that reduced emissions under test conditions only, but he denied personal wrongdoing.

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

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The emissions scandal has crushed Volkswagen's stock, spawned government investigations and lawsuits, called the future of diesel vehicles into question and raised questions about Winterkorn's knowledge of the situation.

The urgency to repair Volkswagen’s reputation goes beyond the benefits to shareholders or even the company’s 600,000 employees worldwide. Volkswagen is Germany’s largest corporation, generating revenue of almost €203 billion ($227 billion) last year in a country where every seventh job is linked to the nation’s export-oriented auto industry.

Volkswagen's board is expected to appoint a successor on Friday. The executive committee proposed that the full board establish a special panel that will consult with external advisers to carry out "necessary consequences" for the company.

Affected vehicles include model year 2009-2015 Volkswagen Beetle, Golf, Jetta, Passat as well as Audi A3 units – all models were equipped with a turbocharged 2.0-litre four-cylinder diesel engine. Fines are expected to come about – initial reports said that automaker could be penalised by as much as US$37,500 per vehicle, and adding it all up would take the total to around US$18 billion. In addition to it, a criminal investigation by the US Justice Department will be regulated. Volkswagen has already seen its share prices plunge 23% on Monday, wiping out at least €15.6 billion (RM74.8 billion) of its market value.

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