VW CEO says new catalytic converter could fix U.S. cars

By Andreas Cremer

DETROIT (Reuters) - Volkswagen AG (VOWG_p.DE) will propose to U.S. authorities a new catalytic converter system that could be fitted to about 430,000 cars capable of cheating diesel emissions tests, Chief Executive Matthias Mueller said on Sunday.

"We have one (catalytic converter) in the works and we believe that will be a part of the technical solutions," Mueller told reporters at a VW event on the eve of the Detroit auto show.

Asked whether he expects the new catalytic converter to bring 430,000 rigged U.S. cars into line with emissions standards, the CEO replied: "Yes, we believe that this is possible."

Mueller is meeting U.S. Environmental Protection Agency (EPA) administrator Gina McCarthy on Wednesday, where he plans to make his proposal.

Mueller expressed optimism that VW and the EPA would be able to bridge their differences. McCarthy has previously bemoaned that both sides have failed to develop "a satisfactory way forward" despite months of talks.

"I think we can now offer a package that will come very close to what the EPA is expecting from us," the CEO said.

Part of the proposal will be an offer by the German company to repurchase some of the affected U.S. cars, said Mueller, but declined to elaborate. Germany's Sueddeutsche Zeitung newspaper last week said‎ VW may need to buy back around 115,000 U.S. vehicles.

"We will offer some solutions and we will see how the reaction (from the EPA) will be," said Mueller. "‎We are confident that we will find a good solution."

Former Porsche CEO Mueller, who took the helm of Europe's largest automaker on Sept. 25, said he will meet "a lot of people" in Washington on Wednesday without giving names, adding that he would also be willing to testify before U.S. Congress on the emissions scandal, if asked.

Mueller, on his first visit to the United States since taking the top job at VW, cited differences between Germany's data protection code and comparable U.S. rules when asked to comment on accusations by U.S. state attorneys that VW was shielding documents from investigations.

He said VW made a "huge mistake" by cheating U.S. emissions tests and any steps by the carmaker to overcome the crisis must include efforts to "better understand" the U.S. market, the world's second-largest.

Asked whether he was worried about the possibility of U.S. criminal investigations, he said: "If that was the case, then yes."

(Reporting by Andreas Cremer in Detroit; Editing by Bill Rigby)