Volkswagen CEO Matthias Mueller announced plans to fit a new catalytic converter system in 430,000 U.S. cars that had been rigged to pass emission tests. See if that fix was enough. (Reuters)

DETROIT — U.S. and California regulators on Tuesday rejected Volkswagen’s proposed fix to cars that have been involved in its emissions cheating scandal, dealing a setback for the embattled automaker that this week had launched an apology tour at the Detroit auto show to win back customers.

The California Air Resources Board said that VW’s “proposed plans contain gaps and lack sufficient detail,” CARB said Tuesday in a statement. And in remarks posted on its website, the chair of the board, Mary Nichols added: “Volkswagen made a decision to cheat on emissions tests and then tried to cover it up. They continued and compounded the lie and when they were caught they tried to deny it. The result is thousands of tons of nitrogen oxide that have harmed the health of Californians. They need to make it right.”

The EPA in a statement said it agreed with California’s findings.

VW reiterated that it is working on a solution and is meeting with EPA officials this week in Washington to submit a reworked proposal. But the statements from the California board and the EPA demonstrate the lengths VW will have to go to fix its cars and regain the trust of regulators.

The giant German automaker was found to have installed software on its diesel engines that allowed it to flout anti-pollution laws. Last week, the U.S. Justice Department filed a civil complaint against VW accusing it of using “defeat devices” on more than 600,000 diesel engines sold under the VW, Audi and Porsche brands. VW has been hammered by the scandal, with outraged customers, a weakened brand in one of its most important markets and a legal bill that could reach into the billions.

In a year when the auto industry set a record for 17.5 million cars sold, VW’s sales fell 5 percent. It now holds just 2 percent of the market.

This week in Detroit, while other automakers were showing off their new vehicles, VW launched an apology tour at the National American International Auto Show.

“We have let down our customers and I am truly sorry for that,” said Herbert Diess, VW chief executive.

“We want to make this right, in the American way,” said Michael Horn, chief executive of Volkswagen of America.

Both men spoke from a stage before hundreds of journalists and industry officials at the Detroit auto show, using the brief time allotted to automakers for showcasing new vehicles to, instead, try to make amends for its emissions-cheating scandal, which erupted last September.

“We’re confident we’ll figure out solutions in the United States,” Diess said.

Diess said VW has “made much progress in the last couple of weeks” in talks with regulators. The automaker also has hired Kenneth Feinberg, the attorney who handled compensation claims for GM’s faulty ignition switches and the BP oil spill, to figure out non-court claims from customers.

Diess said the automaker remains committed to the U.S. market and still plans to expand its plant in Chattanooga, Tenn.

VW did break from its apologies to tout a Tiguan GTE Active Concept vehicle.

Diess said it might sound optimistic, but “we want to reignite America’s love for Volkswagen.”


Michael Horn President and CEO Volkswagen Group of America talks to the audience at the North American International Auto Show at Cobo Center in Detroit (EPA/LARRY W. SMITH)