Volkswagen’s chief executive officer Martin Winterkorn resigned Wednesday after a growing scandal that shed light on 11 million falsified emissions tests from the German carmaker.
“I am shocked by the events of the past few days,” Winterkorn, 68, said in a statement released Wednesday. “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.”
Accepting responsibility for the ordeal, Winterkorn insisted that he personally had committed no misconduct. “I am doing this in the interests of the company even though I am not aware of any wrong doing on my part,” he said.
News of Winterkorn’s resignation comes one week after the company admitted that some diesel cars in the United States contained software designed to evade emissions tests. On Tuesday, Volkswagen said that 11 million cars worldwide contained the software.
Volkswagen shares lost almost a quarter of its market value after the news broke, according to Bloomberg, plunging as much as 23 percent.
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Inside the emissions scandal
A report by the EPA and the California Air Resources Board states that Volkswagen has known for more than a year that American inspectors had discovered something unusual taking place with diesel cars made under the Volkswagen and Audi brands, according to NPR. The first discovery was made in May of 2014 when researchers found wide irregularities when they compared the diesel cars’ performance in emissions tests to real-world driving conditions.
Upon further investigation, it was discovered that when the 4-cylinder diesel cars detected they weren’t hooked up to widely used emissions testing equipment, they “emitted up to 40 times more pollutions than allowed under U.S. standards,” wrote NPR.
The violations, which affect nearly half a million vehicles, could result in as much as $18 billion in fines based on the cost per violation and the number of cars. Criminal prosecution is also possible.
Who will replace Winterkorn?
With the exit of Winterkorn, two candidates have been named as potentials for succession. Fortune has named Matthias Müeller and Herbert Diess.
Matthias Müeller, 62, is the CEO of Porsche and German reports have centered on Müeller as being the one to take over Volkswagen. He did an apprenticeship as a toolmaker for Audi, a subsidiary of Volkswagen, before starting university studies. Müeller has been with Porsche for over 30 years and it doesn’t hurt that Porsche SE holds half of Volkswagen’s shares.
Herbert Diess, 57, is the head of Volkswagen’s Passenger Brand. Prior to that, he was head of development at BMW. He has developed a reputation for cost-cutting and saving BMW USD$4 billion in car parts purchases, according to Fortune.
“I am convinced that the Volkswagen Group and its team will overcome this grave crisis,” Winterkorn said as his closing statement.