Volkswagen to pick Porsche boss as new CEO

"DEFEAT DEVICES"

Regulators in Europe and Asia had already said they would investigate Volkswagen and other carmakers, and Volkswagen also faces criminal inquiries and lawsuits from cheated customers.

Italian prosecutors have opened a preliminary probe, a judicial source said, and the European Commission urged all member states on Thursday to investigate how many cars use the so-called "defeat devices" employed by Volkswagen to rig tests.

The scandal has sent shockwaves through the car market, with manufacturers fearing a drop in demand for diesel cars and tougher regulations and customers worrying about the performance and re-sale value of their cars.

Dobrindt said Europe would agree new emissions tests in coming months that should take place on roads, rather than in laboratories, and that random checks would be made on all manufacturers.

So far, no other carmaker has been found to have used "defeat devices." German rival BMW said on Thursday it had not manipulated emissions tests, after a magazine reported some of its diesel cars were found to exceed emissions standards.

DIESEL CAR DRIVERS WORRIED

Friday's board meeting had originally been due to extend the contract of Winterkorn and set out a new management structure.

Though Winterkorn oversaw a doubling in sales and a near tripling in profit in his eight year rein, he faced criticism for the company's underperformance in the United States and for a micro-managing style that critics say delayed model launches and hampered its ability to adapt to local markets.

Analysts said a new management structure, possibly more decentralised but also with a clearer system of checks, was all the more urgent, with top executives apparently unaware of the emissions test cheating despite a tight control on decisions.

The company has yet to announce which cars and construction years are affected, and whether they will have to be refitted.

A women at the reception desk of a Volkswagen dealership in Frankfurt, who declined to give her name, said she had received many queries from diesel car drivers.

"But we haven't got the ultimate answer because we haven't got much information from Volkswagen," she said.

Volkswagen said in a statement on its website it was working to answer these questions as quickly as possible. "It goes without saying that we will take full responsibility and cover costs for the necessary arrangements and measures," it said.

At 1515 GMT, the stock was up 0.2 percent at 111.8 euros following its decline in previous days.