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VW will recall 2.46 million cars with illegal software in Germany, report says

FRANKFURT (Reuters) -- Volkswagen Group will recall 2.46 million diesel vehicles fitted with illegal emissions-control software in Germany, Die Welt newspaper reported today.

Some 1.54 million VW-brand cars and light commercial vehicles need to be fixed, as well as 531,813 from Audi, another 286,970 at Skoda and 104,197 at the Seat brand, the paper said, without naming its sources.

VW has said that 11 million cars globally may have been fitted with software that can fool official tests for nitrogen oxide emissions. About 8.5 million are in Europe and the German recall is likely to be the basis for callbacks throughout European markets.

The emissions rigging affects VW Group models with 1.2-liter, 1.6-liter and 2.0-liter diesel engines from its EA 189 engine family.

VW CEO Matthias Mueller said last week that the diesel engine refits are 'manageable.' The repair for the 1.6-liter engine involves upgraded software and "relatively simple changes" to the air-filter system that will take less than an hour to implement, VW said in a statement last week.

The 2.0-liter diesel vehicles will only need a software update involving about 30 minutes of work, VW said. Also affected are 1.2-liter diesel engines that likely will only need a software update.

VW has submitted fixes to the German motor transport authority (KBA) for all three diesel engines. The proposals have made a positive impression on regulators, German Transport Minister Alexander Dobrindt said in a statement today. "We are working as quickly as possible to clear up the manipulation and allow Volkswagen to remedy it," he said.

The German recall is due to start in January. Today was the deadline to provide a complete proposal for a fix to German regulators.

VW is facing a scandal on three fronts: In addition to the NOx emissions-cheating software, the automaker has admitted understating CO2 ratings on about 800,000 vehicles. U.S. regulators have also targeted 85,000 VW, Audi and Porsche models with 3.0-liter V-6 diesel engines fitted with emissions-control equipment that was not properly disclosed.

"The most important next step will be as and when VW will conclude its internal investigations," Arndt Ellinghorst, a London-based analyst for Evercore ISI, wrote in a note today. A program the company set up to encourage whistle-blowers expires today.

Bloomberg and Automotive News Europe contributed to this report

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