Volkswagen chief executive Martin Winterkorn resigns

The chief executive of Volkswagen, Martin Winterkorn, has resigned following a scandal concerning the manipulation of diesel car emissions tests by the company in the United States.

Winterkorn is understood to have been one of the major players behind reports that Volkswagen was about to enter Formula One as an engine provider from 2018 under the Audi marque.

Reports this week said that the deal - which would see Audi partner with Red Bull Racing - had been agreed and was simply awaiting the final signatures of Winterkorn and Red Bull drinks magnate Dietrich Mateschitz.

Winterkorn has long been an enthusiastic supporter of the company's involvement in motorsport, and in particular has long been keen to see the Audi name in Formula One. The previous chairman of Volkswagen's board of directors, Ferdinand Piech, was seen as a major block on any future F1 ambitions for the company, but he resigned in April.

That had appeared to cleared the decks for Winterkorn to get his way, but the scandal that has now engulfed the company has thrown all those plans into disarray - and could ultimately see Red Bull left high and dry without a long-term engine solution.

Volkswagen was forced to admit last week that it had been installing a device on half a million diesel cars sold in the US that would give favourable exhaust emissions tests to meet regulations. The company has since admitted that the issue could affect 11 million vehicles worldwide and has been forced to set aside £4.7bn to cover the costs of the scandal.

Experts say that the actual costs could be several times higher than that. There might also be multiple criminal proceedings and civil lawsuits launched against the company and senior management in the US.

"I am clearing the way for a fresh start with my resignation," said Winterkorn in a statement on Wednesday. "The process of clarification and transparency must continue. This is the only way to win back trust."

A new chief executive will be announced at the end of the week, with a statement from the supervisory board adding that it was "expecting further personnel consequences in the next days."

With the financial and personnel fallout from the scandal spiralling by the day, any thoughts of a deal to commit the company to a costly role in Formula One probably couldn't be the furthest thing from anyone's minds right now. Much will depend on who takes over, and just how much money they will have to commit to prestige side projects in the coming years.

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