Volkswagen announced late Tuesday that its negotiations with US justice authorities were well advanced. The draft settlement included $4.3 billion (4.1 billion euros) in penalties coupled with a VW admission of guilt.

US vehicle checks on pollution levels prompted VW in September 2015 to admit that it had installed secret software in hundreds of thousands of US diesel vehicles to cheat exhaust emission tests.

As part of the settlement, VW sources said the company would agree to increased internal controls and would face oversight by an "independent monitor."

Volkswagen's supervisory board is to meet on Wednesday to approve the draft civil and criminal settlement, said sources in Washington and at VW's headquarters at Wolfsburg in Germany quoted by the news agencies, DPA and AFP.

Milestone in world-wide scandal?

A VW deal with the Justice Department would preempt the inauguration of US president-elect Donald Trump on January 20 and could amount to a milestone in overcoming its biggest-ever corporate scandal.

Volkswagen had previously said it has so far set aside 18.2 billion euros to cover costs resulting from the scandal, mostly to resolve claims by US regulators, owners and dealers.

In all, as many as 11 million vehicles worldwide could have the manipulated software installed. The software reduces emissions under testing but switches off under real driving conditions.

The VW announcement followed Saturday's arrest in the US of a Volkswagen executive on a charge of conspiracy to commit wire fraud and violate the US Clean Air Act. 

Switch to electric cars

Since the scandal broke, Europe's largest automaker has striven to develop a new modular platform for mass producing electric cars and by embracing automated driving.

Earlier Tuesday, VW said it had record group sales in 2016 of 10.3 million vehicles, including a 12 percent jump in December.

ipj/rt (dpa, APF, Reuters)