Volkswagen's new CEO: Porsche chief Matthias Müller

Investigations into Volkswagen AG's alleged manipulation of U.S. emissions tests should widen to include the entire auto industry, German and French officials said Tuesday, as regulators begin to ponder whether such trickery is more widespread. Concerns that the scandal could lead to broader damage for the industry hit the shares of car companies across Europe on Tuesday, with Volkswagen's stock down another 5% after dropping as much as 20% on Monday. The state of Lower Saxony, a major Volkswagen shareholder with 20% of the car maker's voting stock, said the emissions allegations raised doubts about tailpipe data published by all car makers. The French government also called for a broader probe, suggesting a European-wide examination of the auto industry. "We need to do it at the European level," French Finance Minister Michel Sapin said Tuesday.

In Germany, Olaf Lies, Lower Saxony's economy minister and a member of the Volkswagen's supervisory board, called for a wider probe and said investigations into the scandal would have consequences for any executives found guilty of deliberate manipulation. "I am convince that everyone is going to become intensely interested in knowing whether the emissions values that have been measured are the real emissions levels," he said. "This question will not only affect Volkswagen, but the entire public debate and will certainly play a role at other companies."

However, after all that fuss, Volkswagen didn't waste much time finding a new chief executive. Current Porsche boss Matthias Müller will become VW's new CEO, the embattled automaker announced today. Müller's name had been floated in recent days as a potential replacement for Martin Winterkorn, who resigned as CEO in light of Volkswagen's ongoing emissions scandal. "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 farewell statement. Müller has led Porsche (which is owned by Volkswagen) since 2010.

Müller will also remain at the helm of Porsche until a replacement has been identified, but Volkswagen hasn't given a timetable. "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. Under my leadership, Volkswagen will do everything it can to develop and implement the most stringent compliance and governance standards in our industry. If we manage to achieve that then the Volkswagen Group with its innovative strength, its strong brands and above all its competent and highly motivated team has the opportunity to emerge from this crisis stronger than before," Müller said in a statement.

The US Environmental Protection Agency has accused Volkswagen of using a "defeat device" to game emissions testing and skirt around air pollution regulations. Volkswagen has since fessed up that the issue affects 11 million vehicles worldwide. The allegations cover models including 2009 to 2015 models of the Jetta, Beetle, Golf, and Audi A3, as well as the 2014 and 2015 Passat. The company is setting aside billions to deal with the scandal's aftermath. Violating the Clean Air Act, which the EPA insists Volkswagen is guilty of doing, could cost $18 billion alone. The US Justice Department has reportedly launched its own criminal investigatio

Last Modified: Mar 21, 2019