On November 6, German media first reported that certain automatic transmissions used in gasoline- and diesel-powered Audi cars had software that could determine whether the car was being tested by regulators and then switch to a more economical shift program in order to reduce carbon dioxide emissions.

The Volkswagen Group has since confirmed that Audi does have transmissions that distort emission levels when cars are being tested.

"Adaptive shift programs can lead to incorrect and non-reproducible results" when the cars are tested, the VW Group confirmed to Reuters via email on Sunday.

In the email, the VW Group said it was in talks with and providing technical details of the adaptive shift programs to regulators in Germany as part of a government-led investigation in response to the media reports.

Adaptive shift programs are designed to change transmission shifting patterns either to boost fuel economy or performance. They often form part of driving modes selectors.

However, Bild am Sonntag, which first reported about the Audi transmissions, claimed the California Air Resources Board discovered software that made the transmissions enter a low-performance mode designed to deliver low CO2 emissions whenever the engine is started and only switch to standard performance if the steering wheel is turned more than 15 degrees in either direction, which wouldn’t be the case during laboratory testing.

Reuters, citing two people familiar with the matter, reported that regulators in the United States were seeking more information to determine whether the software constitutes a defeat device.

The software is different to the original “defeat device” found in millions of diesels cars from the VW Group that was designed to detect whether a car was being tested and then hide nitrogen oxide levels. The VW Group only in October reached an agreed-upon settlement for its 2.0-liter engines fitted with this defeat device. However, the automaker is yet to reach an agreement for its 3.0-liter engines with the device.

Stay tuned for an update.