Volkswagen and Audi could be forced to pay Australians billions of dollars in compensation over the carmakers' global emissions-rigging scandal.
Class action lawsuits against both car brands have been filed by boutique law firm Bannister Law in the Federal Court on behalf of the estimated 91,000 Australians whose vehicles were affected in the fraud.
Rival firm Maurice Blackburn has also received 7,000 claimant registrations and plans to file a lawsuit on their behalf soon.
Threats of legal action have been building since the local Volkswagen subsidiaries revealed the extent of the pollution-test cheating scandal in Australia.
Bannister Law principal Charles Bannister said there was a strong case for the owners of affected diesel vehicles to claim a full refund or other compensation under consumer law.
"The value of car owners' vehicles has been diminished through no fault of their own and people should be compensated," principal Charles Bannister told AAP on Monday.
"Under Australian consumer law we believe that people are entitled to ask for the recovery of the full purchase price or alternatively a diminution in the value of the vehicle."
Volkswagen Australia admitted in October that more than 100,000 diesel cars, including the popular Golf and Polo models, were sold with software that manipulated pollution controls.
More than 11 million vehicles globally have been identified as being part of the fraud, and the German auto giant is facing numerous lawsuits worldwide.
Local claimants will argue that Volkswagen engaged in misleading and deceptive conduct towards consumers and breached statutory guarantees by installing the secret software in its cars from 2008 to 2014.
"There's been admissions that there have been cheating devices placed in the software of the car, designed to cheat emissions testing," Mr Bannister said.
"What that means is the vehicles should never have obtained compliance under the Australian design rules under the Motor Standards Act, and should never have been offered for sale on the Australian market."
Mr Bannister estimated the class suit would cover an estimated 91,000 affected vehicle owners in Australia.
"There are very few consumer class actions on this scale that have been pursued before in Australia," he said.
Volkswagen Australia said that it was inappropriate to comment on impending legal matters.
"VGA understands that this has been a difficult time and apologises for any disappointment and inconvenience felt by our customers," a spokesman said.
"We will do everything we can to fix this problem and regain the trust of our customers."
VW also reassured customers that the vehicles were technically safe to drive and that customers wouldn't bear the cost of a voluntary recall.
The Australian Competition and Consumer Commission is also continuing its investigation into Volkswagen and has previously said it was planning legal action against the auto giant.
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