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US owners of VW cars with diesel engines that can cheat emissions tests have already been given $500, but local owners still have no compensation.
Troubled car maker Volkswagen has outlined the upgrades to more than 80,000 cars in Australia found to have software that can cheat emissions -- but it is still yet to offer compensation to local owners even though US buyers have already each received a $500 voucher.
VW says there will be no major mechanical changes to the cars in Australia and instead they will simply get a computer upgrade.
The roll-out of the updates is due to start in late January 2016, but VW Australia is still yet to announce what impact the changes will have on fuel economy, performance and servicing.
More than one in four owners of the affected Volkswagens in the US -- approximately 120,000 customers -- have taken up the company's offer of a $500 voucher as an initial goodwill gesture.
They have lost the trust of the Australian public
But the newly-appointed managing director of Volkswagen in Australia, former Porsche executive Michael Bartsch, told News Corp no decision had been made on what compensation -- if any -- would be offered to local owners.
"It's a completely different environment. To start with, what they're dealing with in the United States is nothing like what we're dealing with here in Australia," said Mr Bartsch, referring to the different emissions standards in both countries.
But consumer advocates say that if it's good enough for American customers to be compensated due to false claims, then it's good enough for Australian owners.
"This wasn't an accident, this wasn't a mistake, the Volkswagen Group perpetuated a fraud against millions of motorists globally, almost 100,000 of which live here in Australia," said the spokesman for the National Roads and Motorists' Association, Peter Khoury.
"VW Australia should seriously consider their position on offering compensation to local motorists. What they're doing in the US is not the benchmark, it should be the minimum. They have lost the trust of the Australian public."
Mr Bartsch said the $500 compensation deal in North America was "a decision by Volkswagen USA on the way they thought it was best to manage (the crisis) with their customers".
The Volkswagen Australia executive said "the goodwill of our customers is not taken for granted, we will be making the appropriate gestures once we have all the facts in place".
While the company is already facing a class action in Australia of up to $100 million, it is now trying to address the impending slide in the resale values of its cars as buyers lose confidence in the brand.
However, Mr Bartsch insists "there will be no impact on these vehicles that should adversely affect residual values. It is for the market to decide but … one of the drivers of residual value is technical integrity."
One senior Volkswagen Australia dealer, who wished to remain anonymous, said local dealerships have experienced a 25 per cent slowdown in showroom traffic since the scandal broke.
The recall affects 83,981 Volkswagen and Skoda models sold in Australia, and 16,085 Audi vehicles.
Audi Australia spokeswoman Anna Burgdorf said its diesel engines will get the same computer upgrades as VW.
The list of affected diesel cars includes:
Passat CC (2008-2012)
Volkswagen CC (2011-2015)
Audi (certain versions of the following models)
A1 (current generation)
A3 (previous generation)
A4 (current generation)
A5 (current generation)
A6 (current generation)
Q5 (current generation 2.0 TDI)
TT (previous generation)