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Volkswagen is confident it can fix US cars in wake of lawsuit

Volkswagen Chief Executive Matthias Mueller has cast doubt on a report which last week said many managers at the German carmaker knew of, or were involved in, developing emissions test-rigging devices.

[FRANKFURT] Volkswagen vowed to emerge from the diesel scandal even as authorities in the US toughen their stance. 

"We are confident we will find good solutions for the affected US vehicles," Herbert Diess, chief of Volkswagen's namesake brand, said at the Consumer Electronics Show in Las Vegas.

"In recent weeks we've made significant progress."  Mr Diess's optimism contrasted with the most recent comments from the Environmental Protection Agency. The regulator said Monday that talks on a recall for vehicles fitted with software to cheat on emissions tests haven't produced "an acceptable way forward."

The Department of Justice sued the same day, a case that could cost Volkswagen billions of dollars in fines.  The German carmaker is facing a thornier path out of the nearly four-month-old crisis in the US than in Europe. Volkswagen won clearance for relatively simple repairs from German regulators last month, using software upgrades for some engines and, in others, installing a pipe capped by a piece of mesh to regulate air flow. The company estimated that repair would take less than an hour to complete.  Software Upgrade Volkswagen is also proposing that some US cars can be fixed with a simple software upgrade, while others will require hardware. Software upgrades are less expensive.

"It's difficult to compare, because we have different technologies" and different models involved, Mr Diess said in an interview with Bloomberg TV. "It will be a bit more complex in the United States." VW's long-term recovery in the US will require new models, and that's in the works for once the diesel engine recall is done, the executive said. The company showed an emissions-free concept van reminiscent of its hippie-era Microbus at the CES in Las Vegas and has said it'll invest more heavily in electric cars to woo back buyers.

As part of its effort to look ahead, the carmaker signed a deal for a European partnership with Mobileye NV for camera- based technology to process images, which could be used together with detailed digital maps to help cars drive themselves. It didn't disclose financial details.

"We think we have a very attractive portfolio coming," Mr Diess said. "There will be a huge new-product offensive after we get through the crisis."