Volkswagen Australia has confirmed more than 77,000 diesel cars sold in Australia are fitted with emissions-rigging software.
The company confirmed on Wednesday night (AEST) owners of the affected models did not need to take any action until a technical solution was made available by its head office in Germany.
Almost 55,000 passenger vehicles including post-2009 Golf and Polo models have the EA 189 diesel engines at the centre of the worldwide scandal, along with more than 17,000 commercial vehicles and just over 5,000 SKODA cars.
“We understand the disappointment and frustration felt by our customers, dealers and partners in Australia and apologise for any inconvenience this may cause,” Volkswagen Group Australia managing director John White said.
“We are doing everything possible to fix the problem and will be making further announcements in the near future.
“It is important for customers to note that all affected vehicles remain technically safe and driveable and that we will contact them in time to advise what the next steps are.”
Confirmation of Australia’s inclusion in the worldwide emissions cheating scandal comes more than two weeks after it first broke.
The German car maker previously admitted that an estimated 11 million of its diesel cars worldwide were engineered to covertly emit more pollutants when driving on the road.
Software was installed in the affected diesel vehicles to reduce the output of nitrogen oxide (NOx) when the cars were being tested.
When on the road, the software switched mode, causing the vehicles to emit up to 40 times more NOx, the US environmental agency claimed.
The incident sparked a US criminal investigation and worldwide legal action, and also forced CEO at the time, Martin Winterkorn, to resign.
Meanwhile, incoming CEO Matthias Mueller said earlier on Wednesday, the recall of diesel cars affected by the pollution cheating scandal could start by January and finish by the end of 2016.
“We will this week present our proposals for technical solutions to the Federal Motor Transport Authority,” Matthias Mueller told the Frankfurter Allgemeine Zeitung Daily.
“If these are accepted, we will order the parts. If all goes off as expected, we can start the repairs in January.”
The work on all cars could be finished by the end of next year, he added.
Mr Mueller said most of the vehicles affected would only need a minor adjustment in their engines but some would require major intervention, adding that these would be “of course carried out free of charge”.
He said the group would launch a huge cost-cutting program and review several projects including its investments in football.
It owns the VfL Wolfsburg football club and has investments in 17 professional clubs.
Earlier, in a speech to 20,000 staff at the group’s Wolfsburg headquarters, Mr Mueller said the 6.5 billion euro ($A10.19 billion) provision the company had set aside in the third quarter due to the scandal was just the start.
“It includes the estimated cost to fix the affected vehicles,” he said.
“But it won’t be enough. We must prepare for significant penalties.”
– with AAP