German economy minister Sigmar Gabriel called on Volkswagen to fully clear up allegations that it rigged U.S. emissions tests for about 500,000 diesel cars, saying he was concerned about the reputation of the country's carmakers as a result.
“That this is a bad case, I think is clear,” Gabriel told journalists on Monday.
“You will understand that we are worried that the justifiably excellent reputation of the German car industry and in particular that of Volkswagen suffers,” Gabriel added.
Volkswagen saw around $16.9 billion wiped off its the market value on Monday. By early afternoon trading in Frankfurt, Volkswagen's share price was down a stunning 19.4 percent at near three-year low of 130.20 euros ($146.33).
Its dramatic fall weighed heavily on Germany's main stock index, the DAX, which underperformed its peers in Europe with a 0.6 percent decline.
Volkswagen's market woes Monday followed a weekend that saw the company's reputation for probity seriously damaged by revelations from the Environmental Protection Agency in the U.S. that it had skirted clean air rules. All told, the EPA indicated that VW faces fines that could run up to more than $18 billion.
The EPA said VW used a device programmed to detect when the cars are undergoing official emissions testing. The software device then turns off the emissions controls during normal driving situations, allowing the cars to emit more than the legal limit of pollutants.
Volkswagen marketed the diesel-powered cars, which account for about 25 percent of sales, as being better for the environment. The cars, built in the last seven years, include the Audi A3, VW Jetta, Beetle, Golf and Passat models.
On Sunday, Volkswagen CEO Martin Winterkorn apologized, saying “I personally am deeply sorry that we have broken the trust of our customers and the public.”
Winterkorn, who recently saw off a challenge to his authority with the ousting of long-time chairman Ferdinand Piech, ran the VW brand between 2007 and 2015, including the six-year period when some of its models were found violating U.S. clean air rules.
A VW spokesman was not immediately available to comment.
A source close to the company told Reuters any decision on emissions control mechanisms would have been taken at the group's Wolfsburg headquarters, and not by regional divisions.
“This disaster is beyond all expectations,” said Ferdinand Dudenhoeffer, head of the Center of Automotive Research at the University of Duisburg-Essen.