Volkswagen scandal update: German carmaker faces temporary ban in Switzerland

Amid escalating tensions that German carmaker Volkswagen (VW) is facing, Switzerland has temporarily banned the sale of the company’s diesel-engine models, Swiss Federal Roads office announced on Friday.

The office released a statement mentioning that 1.2-litre, 1.6-litre and 2.0-litre diesel engines of VW models -- including VW's Audi, Seat and Skoda brands, could come under the temporary ban, reported BBC. The ban was not applicable to the vehicles that are already in circulation or to the cars with Euro 6 emission category engines.

The Swiss authorities have also confirmed that investigations were still ongoing in the case. The news of the temporary ban comes after U.S. Environmental Protection Agency (EPA) found that the laboratory emissions test results did not match with the real world pollution from Volkswagen’s diesel. Back in 2014, officials of California Air Resources Board and EPA allowed a voluntary recall of diesel-powered cars but it was delayed for months.

The move could reportedly result in the recall of 11 millions cars already sold by the brand and also affect as many as 180,000 unsold or non-registered cars in the Euro 5 emission category. Meanwhile, Matthias Mueller has been named the new CEO of Volkswagen, replacing Martin Winterkorn, who resigned following the scandal on Wednesday.

After his appointment, Mueller said he would restore the company's reputation, noting that it was his first priority. "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,” he said.

Volkswagen’s shares plummeted more than 30 percent after the scandal news. At the stock's lowest point, the company has been facing more than US$30 billion (AU$42.87 billion) wipe-off in its market value. Volkswagen was discovered using software that turns on full emissions control system in a car during an emissions testing. These controls otherwise remain turned off when the cars are normally driven, thus allowing emission of large quantities of pollution.

EPA estimated that the cars belch 40 times greater pollution than mentioned in Clean Air Act.

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