Audi has confirmed that Volkswagen’s emissions-cheating software has been installed in approximately 2.1 million of its luxury vehicles worldwide.

The vast majority were sold in Europe, including 577,000 units in Germany, a spokesperson told Reuters. Affected models include select diesel-powered variants of the A1, A3, A4, A5, A6, TT, Q3 and Q5.

The numbers are comparatively minimal in the US market, where the company sold just 13,000 A3 sedans outfitted with the offending 2.0-liter TDI turbodiesel engine.

Reports surrounding Volkswagen Group’s emissions crisis have mostly focused on the US market, where the company faces potential fines of up to $18 billion, numerous civil lawsuits, several criminal investigations and a tarnished brand. With 11 million cars affected globally, however, the damage is beginning to spread.

Less than a week after VW ousted CEO Martin Winterkorn, the executive now faces a criminal investigation in home Germany, according to The Wall Street Journal. He recently claimed to be “unaware of any wrongdoing on my part.”

The government inquiry will attempt to determine if he or any other executives can be charged for their roles in the alleged fraud.

“We are investigating Winterkorn and other responsible people,” a spokesperson for the prosecutor said. “We are pursuing every possible lead.”

It is barely possible to keep up with the fallout from Volkswagen’s diesel engine scandal, in which the automaker admitted to subverting emissions tests with software in 11 million of its cars sold since 2009. For those who have just returned from under a rock, here is a primer.

In the wake of VW CEO Martin Winterkorn’s resignation, Porsche head Matthias Muller has been tapped for the job, though Winterkorn is reportedly leaving with a $32 million (possibly more) retirement and severance package. Other executives departures have been announced as well. Meanwhile, the EPA and at least 27 states are promising to take swift action.

Early Warnings

This week, more revelations have been pouring in. First, Automotive News cites a report in Germany’s Bild am Sonntag that reveals VW supplier Bosch had provided the automaker with some of the software used in the deception. Bosch, however, says it warned VW as early as 2007 that the diesel engine management software and modules were for testing purposes only. Some of that code ended up in the fraudulent cars, despite Bosch’s claims that it cautioned VW it would be illegal to put that code in cars meant for the street.

A second German paper, the Frankfurter Allgemeine Zeitung, published a story in which a VW engineer is said to have cautioned higher-ups against illegal emissions practices involving exhaust valves as well. No explanation was offered for why management did not follow up with the concerns.

Costly Decisions

Bild am Sonntag further reports that scandal began in 2005, when the TDI diesel engines in question were in their planning stages. Then-head of VW Wolfgang Bernhard and Audi engineer Rudolf Krebs determined that the only way to pass emissions tests was with a urea-injection system similar to what BMW, Mercedes-Benz and VW (on larger models) use.

However, VW was under a massive cost-cutting program and it was decided that the urea solution would be too expensive to implement. It would have added 300 euros to each car. When Bernhard left in 2007, he was replaced by Martin Winterkorn, who moved to new engineers from Audi onto the TDI engine project, and development continued.

From Above

VW USA employees have been vocalizing their lack of say when it comes to the company’s corporate structure, claiming that power is too centralized in the VW headquarters in Wolfsburg. The scandal, however, has prompted the automaker to reshuffle its North American hierarchy, giving the Americans more clout.

This week it was also revealed by Automotive News Europe that the subversion of emissions tests came from managers in Germany. US testing was conducted in-house by VW in Westlake Village, California, but with criteria sent from Germany. If a car failed the test, VW would fly engineers to California to work on the car for about a week. The reason cited for this was that VW did not employ any engineers in the US that had the necessary knowledge.

Once the cars passed, the results were sent back to Germany before being submitted to the EPA for certification. The revelation of VW’s cheating has prompted the EPA to re-evaluate the self-testing policy in which automakers submit their own results.

Ad Lock

Meanwhile, VW has pulled nearly all of its advertising on national media in the US. A big push was on the boards for the launch of VW’s 2016 AppConnect technology package, but that has been shelved.

“Ongoing press coverage and negative consumer social sentiment in the marketplace has effectively drowned out any positive messaging from our national App Connect campaign,” said VP of marketing Vinay Shahani in a memo obtained by Automotive News.

Dealer compensation

In tier-two marketing, which targets specific regions around the country, VW has replaced all its diesel ads with an “alternate message.” VW says that they did not want to confuse customers, as dealers have been ordered to stop selling any VW cars affected by the scandal, new or used.

In another memo, sent to dealers on Friday, VW said that it will compensate them for product that is taking up inventory. For the months of September and October, VW will pay dealers $70 for each new diesel vehicle and $50 for each used diesel vehicle affected by the stop-sale.

Further assistance to dealers come in the form of $300 per car sold in September, $600 if it’s a Passat. A one-percent-of-sticker-price kickback is also being offered for each car sold for the remainder of 2015.

Meanwhile, Volkswagen of America has just launched a dedicated website, VWDieselInfo.com, informing customers about the ongoing scandal. In includes the video by VoA boss Michael Horn embedded below. LeftLane News will have more updates as information becomes available.

Toyota has been missing a player in the hotly contested compact crossover segment, but the latest spy footage shows they are working to fill that gap.

A camouflaged test mule was recently spotted in wet weather and is believed to be a prototype for the production C-HR Concept that was shown at the Frankfurt Motor Show earlier this week. Much of the car is hidden under black covers, but the curvature of the hood’s leading edge and the design of its alloy wheels appear to match those of the concept’s.

Though the C-HR was well received for its sporty and futuristic shape, it will likely be toned down when it sees production. Also, not surprisingly, it grows a pair of rear doors.

The C-HR is also notable for being one of the first cars developed on the TNGA, or Toyota New Global Architecture. The shared modular platform will eventually underpin nearly all of the cars in Toyota’s lineup. The C-HR is expected to be offered in both hybrid and traditional internal combustion setups.

A production version will be introduced at the Geneva Motor Show in March 2016. Watch video of the mule below.

BMW is celebrating the 3 Series’ 40th birthday by launching a limited-edition model appropriately called 40 Years Edition. Curiously, the 40 Years Edition is only available in Japan and in Italy.

The 40 Years Edition was designed to show how far the 3 Series has come since its introduction at the 1975 edition of the Frankfurt Motor Show. Four decades ago, the 3 was exclusively offered as a two-door sedan with a gasoline-burning engine and rear-wheel drive. Today, buyers can order the 3 as a station wagon equipped with a diesel engine and all-wheel drive, which is the configuration that the limited-edition model is based on.

Limited to just 100 units, the commemorative model is finished in Tanzanite Blue Metallic, it rides on 19-inch alloy wheels and it is fitted with the M Sport Package, which gives the 3 a more aggressive look. Each example comes with a numbered luggage set manufactured by Italy’s Piquadro.

Inside, the Italian-spec model gets white leather upholstery on the seats, the door panels and the bottom part of the dashboard, contrasting black leather on the top part of the dash and the door panels as well as piano black trim. Other upgrades include a M three-spoke steering wheel and a small plaque on the center console that’s engraved with the car’s serial number.

The upgrades stop in the engine bay, where the 40 Years Edition is identical to the 320d on which it is based. That means power comes from a 2.0-liter turbodiesel four-banger that makes 190 horsepower at 4,000 rpm and 295 lb-ft. of torque from 1,750 to 2,500 rpm. An eight-speed automatic transmission controlled by steering-wheel mounted paddles sends power to all four wheels.

The 320d reaches 62 mph from a stop in 7.3 seconds and goes on to a top speed of 141 mph. It returns approximately 50 mpg in a mixed European cycle.

Pricing information hasn’t been published yet. Similarly, whether other commemorative models will be offered elsewhere around the world is anyone’s guess.

Leaked images have prematurely revealed the BMW X4 M40i ahead of its official debut. Tuned by BMW’s M division, the M40i is positioned at the very top of the X4 lineup.

Documents uncovered by Germany-based enthusiast website Bimmertoday reveal that the M40i is powered by a 3.0-liter straight-six engine that uses a pair of turbochargers to generate 355 horsepower from 5,800 to 6,000 rpm and 342 lb-ft. of torque from 1,350 all the way up to 5,250 rpm. Bolted to an eight-speed automatic transmission that spins all four wheels, the six sends the M40i from zero to 62 mph in 4.9 seconds — about half a second faster than the X4 35i, the next model down — and on to a top speed that’s electronically limited to 155 mph.

Brake and suspension upgrades keep the power in check, but full details aren’t available yet.

The extra power is complemented by a more aggressive-looking body kit that adds a deep front bumper with four air dams, side skirts, a new rear bumper with a pair of round exhaust outlets, model-specific 19-inch alloy wheels wrapped by low-profile tires and a sprinkling of M emblems all around. Inside, it gets a M-designed three-spoke steering wheel and new sill plates, among other upgrades.

Stay tuned, official details about the BMW X4 M40i will be published in the coming days. BMW’s next hot-rodded crossover will likely be shown to the public for the first time at the Los Angeles Motor Show, and it will land in showrooms in time for the 2017 model year.

Typically, show cars as radical as Honda’s Project 2&4 Concept make a big splash at auto shows and then fade into the shadows, never to be seen again. However, a new report out of the UK suggests that Honda may not be done with its half-motorcycle, half-race car Frankenstein just yet.

In an interview with Top Gear, Honda motorcycle designer Martin Petersson told the magazine, “There will be a next step. It’s been too positive for us to go and complete this project in a basement somewhere.”

Petersson also revealed that, like a motorcycle, the Project 2&4 was designed from the inside out, rather than following the typical automobile design process in which an exterior is penned first. That is likely why the 2&4, a collaboration between Honda’s motorcycle and car design teams, looks so raw.

The Project 2&4, which had its first public showing at the recent Frankfurt Motor Show, is single-seater powered by a 1.0-liter V4 from a MotoGP race bike. Detuned for street use, it still produces over 215 horsepower. The body weighs less than 900 pounds and was inspired by Honda’s 1965 Formula One car that won the Grand Prix of Mexico.

Some outlets have speculated that it could yield a production model based on Petersson’s comments. Petersson, for his part, admitted there wasn’t a clear direction on its future: “The question is what that next step is.” However, he offered this retort: “The company slogan is ‘The Power of Dreams’. If we don’t believe in it I might as well not go to work, right?”

Live images by Ronan Glon.

Typically, show cars as radical as Honda’s Project 2&4 Concept make a big splash at auto shows and then fade into the shadows, never to be seen again. However, a new report out of the UK suggests that Honda may not be done with its half-motorcycle, half-race car Frankenstein just yet.

In an interview with Top Gear, Honda motorcycle designer Martin Petersson told the magazine, “There will be a next step. It’s been too positive for us to go and complete this project in a basement somewhere.”

Petersson also revealed that, like a motorcycle, the Project 2&4 was designed from the inside out, rather than following the typical automobile design process in which an exterior is penned first. That is likely why the 2&4, a collaboration between Honda’s motorcycle and car design teams, looks so raw.

The Project 2&4, which had its first public showing at the recent Frankfurt Motor Show, is single-seater powered by a 1.0-liter V4 from a MotoGP race bike. Detuned for street use, it still produces over 215 horsepower. The body weighs less than 900 pounds and was inspired by Honda’s 1965 Formula One car that won the Grand Prix of Mexico.

Some outlets have speculated that it could yield a production model based on Petersson’s comments. Petersson, for his part, admitted there wasn’t a clear direction on its future: “The question is what that next step is.” However, he offered this retort: “The company slogan is ‘The Power of Dreams’. If we don’t believe in it I might as well not go to work, right?”

Live images by Ronan Glon.

Ex-Volkswagen CEO Martin Winterkorn will receive a $32 million pension after resigning his post this week.

Winterkorn had stepped down on Wednesday amidst one of the largest scandals to rock the automotive world in recent memory, in which 11 million diesel-powered Volkswagen and Audi models were revealed to have been intentionally cheating emissions tests since at least 2009.

According to Bloomberg, the company’s annual report shows that Winterkorn had amassed a pension worth $32 million for his career at the disgraced automaker, which began when he was hired as head of Group Quality Assurance in 1993 and saw him promoted to CEO in 2007.

Winterkorn could also earn a second payout of several million more, described as “two years of renumeration”, depending on how the company’s supervisory board rules regarding his departure. This severance is made possible if the supervisory board ends Winterkorn’s contract before it’s up. However, if it is determined that the contract is terminated for reasons he is responsible for, then Winterkorn loses that severance.

However, the supervisory board has already released a statement recognizing that Winterkorn “had no knowledge of the manipulation of emissions data” and that is “has great respect for Chairman Professor Dr. Winterkorn’s offer to resign his position and to ask that his employment agreement be terminated.”

The Bloomberg report also notes that Winterkorn was Germany’s second-highest paid CEO last year.

BMW-owned Rolls-Royce is preparing to introduce an all-new flagship sedan, and a recent report gives us a better idea of what we can expect from it when it arrives.

Rolls’ next sedan will be just as big as the 12-year old Phantom that it will replace, but it will be much lighter because it will ride on a new modular platform crafted largely out of aluminum. While both short- and long-wheelbase versions of the still nameless range-topper will be offered, the convertible and the coupe models will be axed due to a relative lack of demand.

A V12 engine designed with input from BMW will be the only unit available at launch, and we hear that a gasoline-electric plug-in hybrid variant could be added to the lineup a little later in the production run. Anything smaller than a twelve-cylinder has been ruled out at this point.

Automobile Magazine reports that the sedan will get a more modern and imposing look characterized by a taller front end with rectangular headlights and more striking C-pillars. However, its overall design will be more of an evolution than a revolution, and it will still be instantly recognizable as a member of the prestigious Rolls-Royce family.

Rolls-Royce’s next flagship sedan is tentatively scheduled to make its public debut at a major auto show next year, and it will go on sale in time for the 2018 model year. When it lands, it will carry a base price of approximately $400,000.

Note: One-off Rolls-Royce Phantom Serenity pictured.

Rolls-Royce’s Bespoke Design Studio has introduced a new one-off model called Wraith – History of Rugby. The coupe’s launch coincides with the rugby world cup that is currently taking place in eleven cities across England.

The History of Rugby was designed and built as a homage to William Webb Ellis, the man who allegedly invented rugby in 1823. As Rolls-Royce tells it, “with a fine disregard for the rules of [soccer] as played in his time, [Ellis] first took the ball in his arms and ran with it.”

The coupe gets an English White paint job that matches the color of the British team’s jersey, a subtle deep green stripe right below the belt line and a decorative rose — the symbol of the British team — on both fenders. It rides on 21-inch five-spoke alloy wheels.

The interior has been spruced up with piano black trim on the top of the dashboard and on the steering wheel, seats upholstered in an off-white leather called Seashell and rose emblems embroidered into the headrests. Model-specific sill plates round out the updates.

Rolls-Royce has not made any mechanical modification to the History of Rugby, meaning the sport-inspired coupe is powered by a twin-turbocharged 6.6-liter V12 engine that makes 624 horsepower and 590 lb-ft. of torque. The twelve-cylinder sends the 5,200-pound Wraith from zero to 60 mph in 4.4 seconds.

What the future holds for the Rolls-Royce Wraith – History of Rugby is anyone’s guess at this point. However, envious rugby aficionados who aren’t the lucky new owner of this custom-built model are invited to pick up one of the limited-edition balls that Gilbert has manufactured using the same Seashell and Hotspur Red leather that’s found in the cockpit.