NEW YORK (TheStreet) -- Volkswagen (VLKAY) stock is falling by 4.57% to $25.92 on heavy trading volume on Friday, after German transportation minister Alexander Dobrindt said 2.8 million diesel-powered vehicles had software that allowed the cars to cheat emissions tests, Reuters reports.
The company has admitted that about 11 million diesel-powered passenger vehicles have software that turns on emission controls only when being officially tested.
The software allows the vehicles to emit nitrogen oxides at up to 40 times the approved level, the U.S. Environmental Protection Agency said last week when it issued a Clean Air Act violation notice.
Volkswagen is expected to announce a new CEO today after Martin Winterkorn resigned on Wednesday.
Porsche CEO Matthias Müller is expected to be named as the new head of Volkswagen, Reuters added.
The company's board is also expected to dismiss the head of Volkswagen's U.S. division, engineers from the Audi and Porsche units and the head of brand development of the VW unit, according to Reuters.
Insight from TheStreet's Rating Team
Continuing my series of Nothing's Working, have you noticed that the problems at Volkswagen are spilling over to hurt all automakers? While there is some concern that tests may have overstated the emissions of BMW's engines, the simple truth is what's bad for the goose is good for the gander -- in this case every other automobile company in the world.
Let's face it, there is simply no way that VW isn't in total disarray and there is no way that its sales can hold up at all.
But is that going to stop people from buying cars, or is it going to stop people from buying Volkswagens and instead choose other cars, especially if the opportunity to buy Volkswagens is taken away by government action?
-Jim Cramer's "Volkswagen's Mess Is Good for Competitors, Right?" originally published on 09/24/15 on Real Money.
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