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U.S. regulator has opened Audi investigation: Bild am Sonntag

BERLIN A U.S. government regulator has started investigating Volkswagen’s (VOWG_p.DE) Audi brand over a reported discovery of a new cheat software device at the luxury carmaker, Bild am Sonntag reported, without citing the source of the information.

The German weekly paper said a week ago that the California Air Resources Board (CARB) had this summer discovered cheating software in an automatic transmission Audi which is unrelated to the device that triggered last year’s diesel emissions test-cheating scandal at parent VW.

The software in CARB’s discovery lowered carbon dioxide (CO2) emissions by detecting whether a car’s steering wheel was turned as it would be when driving on a road, Bild had said.

On Sunday, the newspaper reported that the U.S. Environmental Protection Agency (EPA) has initiated proceedings against Audi and will next week hear senior VW group engineers, without elaborating.

Spokespeople for the EPA as well as Audi’s and VW’s Germany-based headquarters declined comment.

But two people briefed on the matter said the U.S. government is asking questions about it and whether it constitutes a defeat device in gasoline powered vehicles.

The EPA and CARB are currently focused on reaching agreement with VW on how to resolve 85,000 3.0 liter 2009-2015 diesel Audi, Porsche, and VW vehicles that emit up to nine times legally allowable pollution levels ahead of a Nov. 30 court hearing in San Francisco.

VW submitted proposed fixes for larger Porsche, Audi and VW diesel vehicles earlier this year and has been in intensive discussions with U.S. and California regulators.

There are also talks ongoing between VW and lawyers for the owners in an effort to reach agreement on how much compensation owners may get. Owners of 2.0 liter polluting vehicles received $5,100 to $10,000 in compensation – in addition to a buyback offer.

At least two class-action lawsuits have been filed against Audi in the U.S. over the issue. One lawsuit says the CARB has “determined that Audi had also surreptitiously installed a gearing related defeat device in the Class Vehicles. The defeat device was used to circumvent the class vehicles’ emission control systems that exist to comply with Clean Air Act emissions standards.”

CARB has declined to confirm it is investigating, but both it and EPA have said they have stepped up the review of vehicles in the wake of VW’s diesel cheating.

(Reporting by Andreas Cremer and David Shepardson; Editing by Bernard Orr)