Police raid VW headquarters as probe mounts in Germany, US

German police swooped on Volkswagen's headquarters on Thursday, carrying away files and hard disks as the investigation into a massive pollution cheating scandal expanded on both sides of the Atlantic.

Private apartments were also raided in Volkswagen's hometown of Wolfsburg and other cities, prosecutors told AFP, as police sought to secure documents and digital data that could point to those responsible for the deception of global proportions.

The raids came as Volkswagen's US chief Michael Horn faced a grilling before Congress, where he sought to distance himself from the scandal while blaming it on engineers in Germany.

Horn told a committee that he had learned in early 2014 that the group's ostensibly environmentally friendly diesel cars breached pollution rules.

But he said he did not know until last month that "defeat devices" had been installed deliberately in the vehicles to help them cheat US pollution tests.

When the emissions problem was first discovered by US university researchers last year, he said, "I had no understanding what a defeat device was. And I had no indication whatsoever that a defeat device could have been in our cars."

Deepening crisis

The world's largest automaker sank into the deepest crisis of its history after revealing last month that it equipped 11 million diesel VWs and Audis with software that switches the engine to a low-emissions mode during tests.

The software then turns off pollution controls when the vehicle is on the road, allowing it to spew out harmful levels of toxic gases.

The shocking revelations have wiped more than 40 percent off Volkswagen's market capitalisation. The company risks billions of dollars in fines and lawsuit damages in several countries, as well as being forced to pay for fixes and to compensate dealers.

In the US, the company could be fined up to $18 billion by the Environmental Protection Agency alone.

"This is a whole lot of money, I'm quite sure," Horn told legislators when asked about the costs of the fraud.

One congressman, Peter Welch, blasted the company, labelling it "the Lance Armstrong of the auto industry," after the champion cyclist shamed and banned for doping.

'A couple of engineers'

In Germany, prosecutors from Lower Saxony said raids were carried out to secure data that "can provide information about the exact conduct of company employees and their identities in the manipulation of exhaust emissions of diesel vehicles".

Several people are targeted in the probe, according to a spokeswoman for the prosecutors, Julia Meyer.

Volkswagen confirmed that it had handed over documents to prosecutors, adding that the company would provide the necessary support to the probe.

A spokesman said it was "also in the interest of Volkswagen" for there to be "a prompt and thorough explanation" of the scandal.

Volkswagen's new chief Matthias Mueller has said four employees have been suspended, adding however that he did not believe that top management could have been aware of the scam.

He said in an interview published Wednesday by the Frankfurter Allgemeine Zeitung that engine development is "a complex process" and that these were tasks in which "a director is not directly involved".

Horn too said Thursday that it was not a decision of top management to install the defeat devices. It was a "couple of software engineers who put (the devices) in," he told US lawmakers.

German media reported Thursday that Volkswagen had not only deliberately done that for the US market, but had also intentionally sought to cheat emissions tests in Europe.

"Without the cheating software, the affected cars would not have been authorised under the Euro 5 emissions regulation," said the newspaper Sueddeutsche Zeitung.

A VW spokesman said whether the defeat devices were activated in Europe was still the subject of investigations. He added that it remained "legally unclear if the device was forbidden under European rules".

The US legislators, saying Volkswagen dealers in the United States were stuck with cars they cannot sell, asked Horn if the company would replace them, or those of consumers saddled with the tainted vehicles.

Horn replied: "No. Our plan is not to buy back the inventory. Our plan is to fix the cars."

He said for those of the most recent model years, the problem requires adjusting the software, which can be done by mid-2016.

But for 430,000 vehicles, it will take more adjustment and time, over one year.

In Germany, Volkswagen submitted its plans and timetable to bring vehicles into compliance on Wednesday. It plans to begin recalling affected vehicles from January, but admitted that it would only complete the refitting by the end of 2016.

The group has set aside 6.5 billion euros ($7.3 billion) in the third quarter over the affair, but that would only likely cover repairs of affected vehicles.