Volkswagen is struggling to plot a course for the future as the German carmaker battles an emissions scandal and attempts to hold off European competition, the company's CEO told CNBC on Monday.
"I would love to tell the investors they should indeed stay calm and can stay calm… we are very confident that we are in good shape as a company," Matthias Mueller, chief executive of Volkswagen, told CNBC via a translator on Monday.
"But indeed the Volkswagen brand is struggling to find its way in the future," he conceded.
France's PSA Group agreed on Monday to buy Opel from General Motors in a deal worth 2.2 billion euros ($2.3 billion), which effectively creates a European car giant able to challenge Volkswagen.
PSA, which makes Peugeot and Citroen cars, is now poised to supersede French rivals Renault to become Europe's second-ranked automaker by sales and close the gap on Volkswagen. In terms of European market share, PSA Group now has around 16 percent with VW estimated to be around 24 percent.
"We are actually quite confident when it comes to the future despite this new reality (of a merger between PSA Group and General Motors' Opel)," Mueller said.
In relation to the German automaker's emissions scandal, VW had put aside around 6.7 billion euros in order to repair the vehicles capable of cheating emissions tests, an amount which the former Porsche boss had previously said should be enough.
Mueller has since told CNBC that the company was preparing for the possibility that extra provisions would be necessary.
Volkswagen has admitted criminal liability in the U.S. after the German carmaker was found to have used technology to reduce the emissions of poisonous nitrogen oxide gases under laboratory testing.
"Well those legal burdens will be around for many years because there are also many plaintiffs, as you know, but what is important is that we have found a solution with the American authorities and with the European authorities as well almost," Mueller said
"We are quite confident that the major part of vehicles can be converted by the end of this year and this will help us to win back the confidence of our customers," he added.
VW now faces bills of around $24 billion of penalties, fines and compensation globally as a consequence of the emissions cheating scandal.
Despite its admission in the U.S., where the car manufacturer sold 500,000 cars affected by the cheating technology, Volkswagen has denied any wrongdoing in the U.K. in which it sold more than 1 million diesel vehicles.