The consumer watchdog is looking into whether Volkswagen car owners in Australia have been caught up in the carmaker's pollution cheating scandal.
The Australian Competition and Consumer Commission's investigation follows the German carmaker's admission it installed emissions-hiding software in 11 million diesel cars worldwide.
"The ACCC is making inquiries to determine if consumers might have been exposed to misleading claims," the watchdog said in a statement on Thursday.
"The ACCC is also considering the rights of consumers under the Australian consumer law."
It's still unknown whether any Volkswagen diesel cars - or sibling Audi and Skoda models - in Australia carry the emissions test-rigging software.
Volkswagen Australia said it was still waiting on clarification from its German head office.
"(We are) still awaiting details with regards to what impact the current diesel emissions investigation has on our market and specifically which models may be affected," a spokesperson told AAP.
The federal Department of Infrastructure and Regional Development, which monitors vehicle emissions standards, has also demanded answers from Volkswagen but is waiting for information.
Volkswagen chief executive Martin Winterkorn has resigned over the furore, which has left the carmaker facing fines of up to $US18 billion in the United States and international law suits.
Investigations are also underway in France and South Korea.
Volkswagen's deception involved putting software in its diesel cars that would turn on pollution controls when the vehicle was being driven in a test environment, but turn them off during regular use.
Accurate readings of the cars in the US found the toxins emitted were up to 35 times higher than the legal limit.
While it is unclear whether the emissions levels would breach Australian limits, if local cars were caught up in the scandal, the damage done to Volkswagen could be great, Sydney University marketing expert Rohan Miller said.
"It could affect the value of the car, the motor performance, the cost of recalls and write-offs," he told AAP.
"The scandal is so far reaching and it's reaching mums and dads who can't afford to take this hit on their family car.
"It's more that just the image of Volkswagens not being environmentally friendly - people are going to have a long-term recall of Volkswagen being a company that's systematically prepared to deceive its customers over a period of time."
Car owners have taken to Volkswagen Australia's Facebook page to express their displeasure.
"I purchased my car not on emission output but rather performance. If the solution ends up being a reflash of the engine computer and performance suffers, it ends up being not what I purchased. Does VW intend to buy back our vehicles when does the first class action begin (sic)," wrote Adam Klooger.
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