The scandal engulfing Volkswagen, which has admitted cheating diesel vehicle emissions tests in the United States, has now spread east as South Korea said it would conduct its own investigation. As Ivor Bennett reports it's also threatening to damage the broader European car industry.
For Volkswagen's US boss, the timing couldn't have been worse A growing scandal, coinciding with a launch that's been scheduled for months. Michael Horn had no choice but to face the music. (SOUNDBITE) (English) MICHAEL HORN, PRESIDENT AND CEO OF VOLKSWAGEN GROUP OF AMERICA SAYING: "Our company was dishonest with the EPA and the California air resources board, and with all of you, and in my German words, we have totally screwed up." Despite the confession, authorities are not easing up. After a US probe found VW was cheating emissions tests on its diesel vehicles like the Jetta, investigations have now begun in South Korea and Germany. There are even calls for an EU-wide inquiry. BGC's Mike Ingram says it won't just hurt VW, but Europe too. (SOUNDBITE) (French) MIKE INGRAM, MARKET STRATEGIST, BGC PARTNERS, SAYING: "One of the reasons why Germany continues to do well as an exporter is that the consumers of their products tend to be quite price-insensitive and implicit in that they're buying quality. And the debacle at VW puts a question mark against that." As well as criminal charges in the US, Volkswagen could face an 18-billion-dollar fine. For group CEO Michael Winterkorn though there are more immediate concerns. With doubts over his expected contract renewal on Friday. ICF Kursmakler trader Arthur Brunner. (SOUNDBITE) (German) TRADER FOR ICF KURSMAKLER AG, ARTHUR BRUNNER, SAYING: "There is considerable doubt about this in the market because the events at Volkswagen will have to have consequences. We expect some changes in the leadership and so the uncertainty is fairly big." VW shares slid to a 3-year low in early trading. While Monday's mauling wiped 15 billion dollars from its market valuation.