Merkel urges 'full transparency' from Volkswagen in cheating scandal

German Chancellor Angela Merkel pressed auto giant Volkswagen Tuesday to assure "full transparency" in a spiralling scandal over pollution test cheating.

"In view of the difficult situation, it is now key to show full transparency (and) clear up the entire matter," she told reporters.

"The (German) transport minister (Alexander Dobrindt) is in close contact with the company, VW, and I hope the facts will come to light as soon as possible."

Merkel said Dobrindt was conducting "the necessary talks" with federal automotive authorities.

"That is the only way to achieve transparency and thus all necessary measures in this area have been put in place," she said.

Volkswagen revealed Tuesday that 11 million diesel cars worldwide are equipped with devices that can trick pollution tests, as the explosive affair wiped a third off the company's market value and could cost its chief executive his job.

Authorities from France to South Korea to the United States announced investigations and threatened legal action, prompting VW to announce that it was setting aside 6.5 billion euros ($7.3 billion) in provisions for the third quarter to cover the potential costs of the scandal.

VW shares, which dived 17 percent on Monday, plunged by another 23 percent to a low of 101.30 euros during trade on the Frankfurt stock exchange as the automaker's new revelations, including a warning that it will have to lower its profit outlook, sent investors fleeing.

The scandal also levelled a heavy blow against German pride in both its industrial prowess and its "green" credentials.