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VW Australia facing $20m fines

Australia's consumer watchdog says it is "frustrated" by VW's lack of action.

Australia's consumer watchdog may use its powers to compel the troubled car maker to come clean as it remains silent for the second week in a row.

Just when you thought things couldn't get worse for Volkswagen -- the company that cheated diesel tests on 11 million cars globally -- it is now facing the prospect of at least $20 million in fines locally.

Australia's consumer watchdog says it is "frustrated" by VW's lack of action and is on the verge of forcing the company to come clean on which cars are affected here.

As the global scandal enters its second week, Australian Volkswagen owners -- and, it turns out, the Federal Government -- are still in the dark on how many customer cars may be affected.

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ALSO: ACCC launches investigation into VW diesel scandal

Industry analysts initially believed the $1.1 million fine under Australian Consumer Law was for each of the Volkswagen, Audi and Skoda brands -- which share the same diesel engines with cheating software -- capping the penalty to $3.3 million.

The penalties could be extremely large and way beyond just one per company

However, ACCC chairman Rod Sims says the company may be hit with a $1.1 million fine per offence, which could see the total easily eclipse $20 million based on conservative estimates compiled by News Corp Australia.

"The penalties could be extremely large and way beyond just one per company," said Mr Sims.

"One offence is misleading consumers about what VW has said when they've advertised the cars," says Sims, "while the other offence is by having these devices in use in the cars, that's a breach of (Australia's car regulations)."

The ACCC says if Volkswagen is found guilty of a breach "then the question is, how many breaches?"

For example, if the fuel economy and emissions claims on the government rating label on Volkswagen diesel cars are found to be false, VW can be fined for two misleading claims per car -- up to $2.2 million.

With at least 10 diesel models across the Volkswagen, Audi and Skoda brands sold locally between 2009 and 2015 that brings the risk of fines to $22 million.

But there could be more fines around the corner, warn industry insiders, because the cars technically speaking are on the road illegally.

"If (the Federal Government) has been given paperwork now proven to be false, that means those cars are no longer approved for Australian roads," a former VW Australia executive told News Corp Australia, speaking on condition of anonymity.

"That means they can no longer be registered to be driven on Australian roads or insured. Will the government cancel their approval to be on Australian roads?"

Industry sources say VW is exposed to a $25,000 fine for each car on the road due to false documents, but the Department of Infrastructure was yet to confirm the amount of such a penalty as this article was published.

Because the cars are not a safety hazard, it's unlikely the Federal Government would take such drastic action as banning from the roads the estimated 50,000 VW diesels and 20,000 Audi diesels in Australia, say industry insiders.

The affected VW and Audi diesel cars are emitting up to 35 times more toxins than what is allowed, so the damage is environmental rather than a road safety issue.

In the UK overnight VW confirmed more than 1.1 million diesel cars sold there were equipped with software designed to cheat emissions tests, including more than 500,000 VWs, 390,000 Audis, 76,000 Seat cars, 130,000 Skodas and almost 80,000 VW delivery vans.

News Corp understands VW, Skoda and Audi are in discussions with Australian authorities and are about to issue a recall for the affected cars late this week or early next.

While the car giant is still trying to come to terms with the biggest ever corporate cheat in the automotive industry, the ACCC is running out of patience.

"We are frustrated," said Sims. "The golden rule when these things occur is to get information out quickly and that's not happening."

The ACCC says it has been investigating the VW crisis since the news broke globally two weeks ago.

"We are asking for information and will keep asking for information," said Sims.

"At the end of the day we have compulsory information gathering powers, so if we can't get what we want voluntarily then we have other ways to get information. We'll get the information one way or the other."

Mr Sims said he understands VW was "having problems liaising with their overseas head office" but "there will come a time when … we can use our compulsory powers".

Meanwhile, VW owners in Australia are not likely to get new engines if a recall occurs.

While overseas markets may get mechanical changes to the affected diesel engines -- or a replacement -- vehicles sold in Australia are likely to simply get a computer upgrade.

Has the emissions scandal put you off buying a diesel car? Let us know in the comments below.