Traffic at Volkswagen dealerships 'quite good': AutoNation CEO

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Traffic at U.S. Volkswagen dealerships remained "quite good" in September even after the German automaker became embroiled in an emissions test cheating scandal, AutoNation CEO Mike Jackson said Friday.

Last month, Volkswagen admitted to installing so-called "defeat devices" in about 11 million diesel vehicles worldwide. The autos' emissions exceeded federal regulations, but software embedded in the vehicles was engineered to adjust those emissions during tests.

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Jackson said Volkswagen's sales were flat last month, compared with a 21-percent rise in September new vehicle sales at AutoNation, the country's largest auto dealer chain. That underperformance is to be expected given that Volkswagen has put a sales stop on all 2016 diesel models.

"If 25 percent of your business is on sales stop, then of course the sales are going to be down. But the customers are still in the showroom," Jackson told CNBC's "Squawk Box."

He added that the scandal has not yet spilled over to Volkswagen's Audi or Porsche brands, which saw September sales rise 16 percent and 22 percent, respectively.

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Jackson told CNBC last month Volkswagen needs to take full accountability and responsibility. The same day, then chief executive Martin Winterkorn stepped down. He was replaced by Porsche CEO Matthias Muller.

"Volkswagen still needs to take all the right steps. I think that's in the works. We need answers for our customers, but if they take the rights steps, they can get through this," he said Friday.

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Correction: This story has been updated to reflect that the number of vehicles with defeat devices is 11 million worldwide.