Volkswagen and its Audi unit froze sales of diesel car models in the United States Wednesday after new accusations on the use of software that cheats on emissions tests.

The move came after another Volkswagen unit, Porsche, halted sales of its Cayenne diesel sport utility vehicles following the new allegations from the Environmental Protection Agency.

The EPA said Monday that VW, Audi and Porsche cars with 3.0 liter diesel engines were equipped with illegal "defeat devices" which cover up excessive emissions of poisonous gases when the vehicles undergo pollution testing.

Prior to that the company had admitted only that its 2.0 liter diesel engines had defeat devices, and following the EPA's announcement Volkswagen denied the larger engines were similarly equipped.

The new sales freeze covers diesel VW Touaregs, Audi A6, A7 and A8s, and Q5 and Q7s, all from the 2014-2016 model years.

"We are just being more proactive," said Audi spokesman Bradley Sterz.

"The difference here is that we are not entirely clear on what data the agency used to come out with this notice of violation. We want to understand how the regulator made its conclusions."

Moody's cuts VW's credit rating amid emissions scandal
Washington (AFP) Nov 4, 2015 - Moody's hit embattled German automaker Volkswagen with a credit downgrade Wednesday, saying the company's reputation and earnings were at risk from the growing emissions cheating scandal.

Moody's cut the company's rating by one step to A3, citing expanded allegations on emissions cheating and the company's admission that it falsified fuel consumption levels on some cars.

"In Moody's view, these new developments pose additional risk to Volkswagen's reputation, future sales and cash," the ratings agency said.

"They also suggest serious internal control and governance issues, which may be more widely spread than believed initially."

Moody's particularly cited the US Environmental Protection Agency's accusation on Monday that the company included emissions-cheating defeat devices on high-end 3.0 liter diesel engines, in addition to the 2.0 liter diesels Volkswagen admitted in September had the illegal devices that hid the amount of nitrogen oxide emitted.

The larger engines are installed on high-priced Volkswagens, Audis and the Porsche Cayenne.

"This new notice of violation concerns the last generation of diesel engines and more widely affects Volkswagen's premium brands -- Audi and Porsche -- which are top contributors to Volkswagen's profitability," Moody's said.

The new EPA accusation, which Volkswagen denied, means VW will probably be locked in protracted litigation and could result in costly remediation, both in fines and more restrictions on its activities in the future, Moody's said.

Moody's also pointed to Volkswagen's announcement Tuesday that, in addition to the 11 million cars involved in the defeat device scandal, another 800,000 showed "inconsistencies" on carbon-dioxide emissions and fuel consumption.

The company estimated this latest revelation could cost it two billion euros ($2.2 billion).

But Moody's said that Volkswagen's business and financial strength give it room to shore up its cash flow for unplanned costs, and so justify the medium investment grade credit rating of A2.

Moody's rival Standard & Poor's, which dealt Volkswagen a downgrade on October 12, held its rating unchanged at A- on Wednesday, noting that Volkswagen's S&P rating is already on a negative watch. S&P's A- grade is roughly equivalent to a Moody's rating of A3.

S&P noted Volkswagen's announcement Tuesday that it had identified irregularities related to CO2 levels and fuel consumption levels in some of its vehicles.

"This development... extends and deepens the scope of the risks and costs facing the company... and demonstrates the wide-ranging negative credit consequences facing the company," S&P said.

India to question Volkswagen over local emission tests: report
New Delhi (AFP) Nov 4, 2015 - India's government will demand answers from Volkswagen after major discrepancies were found in emission tests on its cars, an official said Wednesday, becoming the latest country drawn into the pollution cheating scandal.

The embattled auto giant will be formally asked to explain results of tests carried out on three VW models by the Automotive Research Association of India (ARAI), the government official said.

The German company sparked global uproar in September when it admitted to fitting sophisticated software in its diesel engines to skew emission testing.

"Testing agency ARAI has found significant variation in emission levels in on-road vehicles of three Volkswagen models compared to laboratory measurements," Ambuj Sharma, additional secretary of the heavy industries ministry, told the Press Trust of India news agency.

Sharma said his ministry will issue the notice to the company over its concerns for diesel models Jetta, Audi A4 and Vento.

An ARAI official told AFP it ran tests on all models made and sold in India.

"We had been tasked to do testing of cars in September. We did rigorous tests and the report is with the government," the official said, requesting not to be named.

Volkswagen has admitted to equipping 11 million of its diesel vehicles with devices designed to cheat official pollution tests, revelations that have sparked global outrage.

On Tuesday, US regulators accused the carmaker of also using the so-called defeat devices on its larger 3.0-litre diesel vehicles, which VW adamantly denied.

The devices turn on pollution controls when cars are undergoing tests and off when they are back on the road, allowing them to spew out harmful levels of nitrogen oxide.

A statement issued by Volkswagen India confirmed that it had received a notice from ARAI and promised to "fully cooperate" with the government.

"It was agreed with the government of India that Volkswagen India will present its results from the evaluations regarding the diesel engine emissions topic by end of November 2015. The next steps would depend on the findings of these evaluations," the statement added.

Volkswagen India has two factories in the western state of Maharashtra, with a manufacturing capacity of more than 200,000 cars annually.