Engines from Volkswagen AG's luxury brand Audi AG have been implicated in the German car maker's emissions crisis, leading the unit to suspend two engineers suspected of rigging engines to cheat emissions tests.

Authorities in the U.S. and Germany have launched investigations of the world's No. 2 premium car maker on Wednesday, marking the first time that engines built by Audi for the Volkswagen group are clearly in the focus of the emissions crisis.

The emissions scandal, which broke on Sept. 18, involved diesel engines built by the VW brand that were also used by Audi and other units of the Volkswagen group. The new U.S. and German investigations focus on larger three-liter V6 engines designed and built by Audi. U.S. environmental authorities have said that one model of the V6 engine contained software to circumvent emissions tests, known as a defeat device.

In an interview published Thursday, Audi Chief Executive Rupert Stadler told a regional German newspaper that the company's engineers—who had repeatedly told the management board that the three-liter V6 didn't contain a defeat device—changed their story during a board meeting last week.

"I asked them: Is that a defeat device?" Mr. Stadler told Donaukurier in an interview that appeared on the newspaper's website. "And then they said, 'We have to assume that in the USA part of the software that controls the [engine] heating function can probably be considered a defeat device."

Mr. Stadler said it still isn't clear if Audi engineers acted knowingly with the intent to commit a crime. Volkswagen and Audi have said repeatedly that the software on the V6 engines is only designed to heat the engine to enhance reduction of nitrogen oxide emissions. Mr. Stadler said Audi is now conducting its own investigation into the technology.

Audi confirmed the veracity of the comments made by Mr. Stadler in Donaukurier.

Audi had told U.S. environmental authorities earlier this month that these V6 engines—which are used in Audi sedans and a family of luxury sport-utility vehicles produced by Audi, VW, and Porsche—didn't comply with U.S. environmental law. As a result, the California Air Resources Board, or CARB, on Wednesday launched an official probe of Volkswagen, Audi and Porsche vehicles using the three-liter diesel engine in the model years 2009-2016. It gave VW, Audi and Porsche 45 days to submit a detailed recall plan for the cars.

"We fully intend to work on solutions to present to regulators within this window of time," a spokesman for Audi in the U.S. said in an email response. "We take this very seriously and treat responses to the agencies as a solemn responsibility."

German prosecutors also launched new investigations into allegations of cheating by Audi on Wednesday. The U.S. and German investigations could lead to criminal charges against Audi employees. No individuals have so far been charged with wrongdoing in the investigations of Volkswagen or Audi.

The two suspended Audi engineers join three top engineers—one from VW, one from Audi, and one from Porsche—with senior management roles suspended in September.

Meanwhile, a spokeswoman for the U.S. Environmental Protection Agency said the agency is weighing possible enforcement options against Volkswagen related to the three-liter diesel-engine vehicles and continues to investigate the matter.

Thursday's disclosure puts pressure on Mr. Stadler, a veteran Volkswagen executive. Mr. Stadler's background is in finance and his lack of engineering expertise has long been seen inside Volkswagen as an obstacle to him ever becoming CEO of the Volkswagen group. The current crisis raises questions about his ability to grasp the complex technology issues in a crisis that is rooted in the company's engineering culture.

Mr. Stadler has declined repeated requests to speak to The Wall Street Journal about the emissions crisis.

Labor representatives at Audi endorsed Mr. Stadler Thursday, saying he "must continue as chief executive" to lead the internal investigation.

News of the new investigations came as Volkswagen provided details about how it plans to fix nearly nine million cars in Europe tainted by the diesel software used to manipulate emissions tests.

The fix will be carried out by a combination of a software update and installation of a small cylindrical part that stabilizes air flowing into the engine, allowing more precise fuel injection and greater reduction of toxic emissions.

The repair will be necessary for 1.2-liter and 1.6-liter diesel engines. The newer 2.0-liter engines only require a software update.

The emissions scandal affects nearly 11 million vehicles world-wide, most of which are in Europe. About 500,000 cars in the U.S. are affected by the software.

The relatively simple fix for the lion's share of the tainted vehicles is welcome news for Volkswagen and suggests that the costs of a global recall set to begin in January could be significantly lower than initially expected.

It is still unclear how Volkswagen will fix the affected vehicles in the U.S. The company said the fix approved in Europe isn't applicable to the U.S. vehicles. Volkswagen is in talks with U.S. environmental authorities over how to fix the cars in the U.S.

Write to William Boston at william.boston@wsj.com, Friedrich Geiger at friedrich.geiger@wsj.com and Mike Spector at mike.spector@wsj.com

 

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(END) Dow Jones Newswires

November 26, 2015 19:45 ET (00:45 GMT)

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