The KBA has opened an investigation into whether a software update for 1.2-litre engine cars, including the popular Polo, enabled them to cheat emissions tests, the newspaper said, without naming its sources.
The Bild am Sonntag said prosecutors were preparing charges against unnamed Volkswagen managers for suspected fraud, noting that the company had given assurances in 2016 that the 1.2 litre engines did not use illegal emissions cheating defeat devices.
The KBA was considering forcing 30,000 affected cars in Germany off the road, although it was more likely just to order further remedial work, the newspaper said. There are 370,000 of the models under investigation in Europe in total.
Germany's Transport Ministry, which oversees the KBA, said it was aware of the allegations, but noted that the KBA's investigation was not yet concluded.
He said Volkswagen had informed the authorities and the company was in continuous dialogue with them.
(Reporting by Jan Schwartz, writing by Emma Thomasson; Editing by Keith Weir)
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