Volkswagen appoints new CEO

Volkswagen on Friday named Matthias Mueller – the head of its Porsche sports car brand – chief executive, as the fallout from the U.S. vehicle emissions test-rigging scandal broadened and the Environmental Protection Agency (EPA), whose outdated testing procedures Volkswagen was able to circumvent, announced an overhaul of its standards.

Mueller, 62, named CEO at a Friday board meeting, will take responsibility for steering Volkswagen through the biggest business crisis in its 78-year history. The crisis deepened as officials in Europe and the United States stepped up their investigations.

In the U.S., the EPA said Friday it would launch sweeping changes to the way it tests for diesel emissions after getting duped by clandestine software in Volkswagen cars for seven years.

In a letter to car manufacturers, the EPA said it will add on-road testing to its regimen, "using driving cycles and conditions that may reasonably be expected to be encountered in normal operation and use, for the purposes of investigating a potential defeat device," similar to the one used by Volkswagen.

The testing would be in addition to the standard emissions test cycles already in place, the EPA said.

Volkswagen's sophisticated software allowed its cars to pass tests in the lab and then spew pollution into the atmosphere while on the highway. The changes announced Friday are designed to detect software and other methods automakers might use to rig a test.

Separately, a group of at least 27 U.S. state attorneys general launched a multi-state investigation Thursday of Volkswagen's representations to consumers about its diesel vehicles, and said it will send subpoenas to the automaker.

“I am furious that the world’s leading car company willfully took steps that polluted our environment and deceived consumers,” Maryland Attorney General Brian Frosh said in a statement.

In Germany, the transport minister, Alexander Dobrindt, said Thursday that Volkswagen had manipulated tests in Europe too.

"We have been informed that also in Europe, vehicles with 1.6 and 2.0 liter diesel engines are affected by the manipulations that are being talked about," Dobrindt told reporters, adding it was unclear how many vehicles in Europe were affected.

Dobrindt said Europe would agree on 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.

Volkswagen has said 11 million cars globally had the software fitted, but it was not activated in the bulk of them. In addition to the cost of regulatory fines and potentially refitting cars, Volkswagen faces criminal investigations and lawsuits from cheated customers and possibly shareholders.

The company is under pressure to act decisively, with German Chancellor Angela Merkel urging it to quickly restore confidence in a business held up for generations as a paragon of German engineering prowess.

"There will be further personnel consequences in the next days and we are calling for those consequences," Volkswagen board member Olaf Lies told the Bavarian broadcasting network.

The European Commission urged all member states to investigate the use of so-called defeat devices by carmakers to cheat emissions tests and said there would be "zero tolerance" of any wrongdoing.

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

The new CEO will also need to improve communications with dealers and customers, with many frustrated that Volkswagen has yet to say which models and construction years are affected by the crisis and whether cars will have to be refitted.

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

Wire services