Investing.com -- Two days after former Volkswagen (XETRA:VOWG) AG CEO Martin Winterkorn resigned from his post amid a diesel manipulation scandal that has rocked the automobile industry, the German automaker named Porsche CEO Matthias Mueller as its new chief executive on Friday.
Volkswagen stock has lost 30% in value and billions in market capitalization after the U.S. Environmental Protection Agency (EPA) and the State of California notified the company last week that it violated Federal clean air standards by installing a sophisticated software algorithm in certain vehicles that detects when the cars are undergoing official emissions testing. Volkswagen later admitted this week that the device could have been used in millions of vehicles worldwide. The defeat device or emission controls were typically turned off when the vehicles were not being monitored for testing, according to officials from the EPA and the California Air Resources Board (CARB).
During normal operations when the defeat device is not in use, the Volkswagen vehicles can emit nitrogen oxide levels of up to 40 times the standard defined by the Federal Clean Air Act, according to the EPA.
Mueller, 62, joined Volkswagen AG in February, 2007, to head the company's product management division after Winterkorn's appointment as CEO. Mueller began serving as the CEO of Porsche since July, 2010, before becoming a member of the company's executive board three months later. Mueller joined Audi in 1977, where he was in charge of system analysis from 1984-1993, before heading the company's product management division in 1995. Starting in 2003, Mueller gained responsibility for all product lines at both Audi and Lamborghini.
"Matthias Mueller is exactly the right man at the right time to make a fresh start and to drive clarification of the current crisis that has hit our company with decisiveness and to draw the right conclusions," Volkswagen said in a statement. "We expressively value his critical and constructive approach."
Separately, Volkswagen announced on Friday that its Supervisory Board has commissioned attorneys in both Germany and the U.S. to conduct an internal investigation to fully clarify the manipulation of emissions data in its diesel engines.
"There is absolutely no excuse for the manipulations which have deeply shocked Volkswagen. The company will leave no stone unturned in getting to the bottom of this, will call those responsible to account, and take the necessary actions," the Volkswagen Supervisory Board said in a statement.
Shares in Volkswagen fell 4.85 or 4.32% to 107.30 on Friday.