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Volkswagen CEO Resigns

In the wake of the scandal over fraudulent reports surrounding the emissions of diesel vehicles, Volkswagen's CEO Martin Winterkorn is stepping down. The head of the world's second-largest automobile manufacturer made that announcement on Wednesday with the company planning to announce a successor shortly.

According to CNBC, rumored contenders for Volkswagen's top job include the company's branding czar Herbert Diess, Porsche chief Matthias Muller, and Audi boss Rupert Stadler.

While it may take a day to get a new helmsman, erasing the mess that was created on Winterkorn's watch will be much more difficult, a task that will pose a huge challenge to his successor.

In 2015, U.S. regulators nailed Volkswagen over its use of "defeat devices" designed to mitigate the assessments of environmentally harmful emissions from its diesel-powered vehicles, a component that was installed in modules going as far back as 2008. With that feature in place, the cars were initially able to pass emissions tests until the Environmental Protection Agency discovered the technology in what's been dubbed the "diesel dupe," or "dieselgate".

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Initially, Volkswagen responded by reporting that the discrepancies in reported emissions were as a result of irregularities in the component's ability to measure carbon dioxide effluence. Besides Volkswagen models, the discrepancies were also discovered in Audi and Porsche vehicles.

Since then, however, accusers have pointed their fingers directly at Winterkorn, accusing him of ignoring any warnings surfacing in 2014 that the company might be caught for cheating, an allegation the former Volkswagen head denied.

Once caught, Volkswagen suffered on the market big-time. The scandal, which involved the manufacturing of some 11 million vehicles, resulted in its market value plunging by $29 billion and a negative reputation that will further hamper the company's economic performance.

While Winterkorn claimed he was shocked and stunned over the news of the scandal, that didn't stop the car company from cleaning house by forcing him to resign, with reports that many executives under his charge are expected to follow.

Recalls of the vehicles involved will enable the company to fix the component, but that won't exactly going to reverse the plunging consumer confidence in Volkswagen. Even more difficult will be in determining whether Winterkorn actually knew about the scandal in the first place.

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