An association of US Volkswagen dealers has slammed the German carmaker's "mismanagement" of a far-reaching emissions scandal, saying its decision to remove Michael Horn as chief executive in the US puts the company "at more risk, not less."

Europe's largest carmarker, which admitted in September that 11 million of its diesel-powered vehicles were fitted with software that cheats on emissions tests, announced overnight that Horn would step down and that Heinrich Woebcken would take his place.

"We are troubled watching the mismanagement of this scandal, and how it may impact the ultimate decisions by the authorities in the United States," the company's US dealership network said in a statement released after the announcement.

"This change in management can only serve to put the company at more risk, not less," the statement said.

Media reports on Wednesday said that US authorities had widened their investigation into the emissions scandal through the use of bank fraud and tax laws. The US Justice Department declined to comment on the revelations.

A VW spokeswoman only said that the company would continue to cooperate with all relevant US authorities. VW already faces more than 500 lawsuits from US car owners.

German prosecutors said Tuesday they were expanding the number of suspects in their probe from six to 17, adding that the suspects did not include former or current board members.

Prosecutors in France announced this week that they are planning to launch a serious fraud investigation into the carmaker. About 950,000 VW cars in France are affected by the scandal.

VW's top union representative, Bernd Osterloh, warned Tuesday that there could be drastic consequences in the wake of the scandal.

"If Volkswagen's sustainability is endangered by a penalty of a unique size, this will also have dramatic social consequences - not just at our US locations, but also in Europe and elsewhere," Osterloh told a meeting of VW workers.

Separately, company sources told dpa on Thursday that the scandal would result in about 3,000 administrative job cuts by the end of 2017.

Sources in the company said that the job cuts would be managed through partial retirement schemes and a redistribution of tasks and that no employee would be forced out.

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