One day after the U.S. Federal Trade Commission, which investigates companies accused of false and deceptive advertizing, joined the Justice Department and Environmental Protection Agency in their probe against the German carmaker, Germany’s federal motor vehicle office (KBA) said it will force Volkswagen to recall 2.4 million vehicles in the country.
“We are ordering the recall,” a spokesman for KBA told Reuters Thursday, confirming an earlier report by the German newspaper Bild. The newspaper had earlier reported that the KBA had rejected a proposal submitted by the carmaker earlier this month, under which owners of the affected vehicles could voluntarily bring in their cars for fixes.
Volkswagen’s use of “defeat devices” to cheat emissions tests in the U.S. came to light last month. A total of up to 11 million diesel vehicles have been affected worldwide. The scandal eventually led to the resignation of former CEO Martin Winterkorn and triggered widespread investigations into the carmaker’s practices.
Earlier, on Wednesday, Winfried Vahland -- who was named Volkswagen’s head of North American operations three weeks ago -- resigned citing "differing views," further amplifying the worst crisis in the company’s 78-year history.
According to analysts cited by Reuters, the company could face up to 35 billion euros ($40 billion) in fines and legal costs in the U.S. and Europe. Moreover, in addition to wiping out nearly a third of the company’s market value, the scandal has also hurt investor morale in Germany, which fell sharply in October.