"In view of the difficult situation, it is now key to show full transparency (and) clear up the entire matter," she told reporters.
"The (German) transport minister (Alexander Dobrindt) is in close contact with the company, VW, and I hope the facts will come to light as soon as possible."
'Cheating software' in 11 million cars
Volkswagen admitted on Tuesday that 11 million of its cars worldwide have been fitted with a programme that manipulates its output of polluting gases.
The latest revelations suggest the scandal could now reach far beyond the borders of the United States, where authorities revealed on Friday that VW had used distorted the true emissions levels from hundreds of thousands of cars.
The actual emissions from its diesel engines could be up to 40 times the legal limit in the US.
The company also announced on Tuesday that it has set aside €6.5 billion euros to cover compensation costs and legal penalties that may be incurred from the scandal and also issued a warning about the impact on its profits.
After losing $14 billion in trading on Monday, the car giant's shares continued to tumble on Tuesday, losing a further 20 percent in value as the scandal escalated.
An iconic German brand: -20.1% pic.twitter.com/SJKAvN6njD— Holger Zschaepitz (@Schuldensuehner) September 22, 2015
US opens criminal investigation
The US Department of Justice has launched a criminal investigation of Volkswagen after the German automaker admitted it systematically violated US air pollution tests, media reported Monday.
The US investigation was reported by Bloomberg citing two US officials familiar with the probe, and by The Wall Street Journal, which referred to people close to the matter.
News of the criminal probe piles more pressure on VW, the world's largest automaker by sales in the first half of this year.
Italy opens probe
France calls for European investigation
Finance Minister Michel Sapin said a "Europe-wide" probe was needed after revelations that hundreds of thousands of Volkswagen diesel cars were fitted with software that secretly thwarts pollution tests in the United States.
Sapin told Europe 1 radio that in order to "reassure" the public, it was "necessary" to carry out checks on cars manufactured by other European carmakers.
"We are in a European market, with European rules that need to be respected," Sapin said.
"Even if it's just to reassure people, it seems necessary to me that (checks should be carried out) also on French carmakers," he said.
The French carmakers' federation CCFA supported the idea, saying such an investigation "will allow us to confirm that French carmakers respect the procedures for approval in all of the countries where they operate".
But the EU on Tuesday said it was too early to launch a European investigation into whether Volkswagen has cheated in pollution measuring tests after shock revelations in the United States.
"We are taking the matter very seriously," European Commission spokeswoman Lucia Caudet said in an email to AFP, adding that Brussels was in touch with Volkswagen and US authorities.
"Investigations are ongoing within Volkswagen as well as in the US and in Germany. Therefore, it is premature to comment on whether any specific immediate surveillance measures are also necessary in Europe and whether vehicles sold by Volkswagen in Europe are also affected," she said.
VW's mea culpa
Meanwhile VW's head of operations in the USA, Michael Horn, offered a full admission of guilt on the part of the company at a conference in New York on Monday.
We were dishonest,” he said. “We were dishonest to the EPA, we were dishonest to the authorities in California and, worst of all, we were dishonest to our customers. We totally screwed up.”
On Friday US authorities said the company had acknowledged that it had equipped about 482,000 diesel VW and Audi cars in the US with software called a "defeat device" that covertly turns off pollution controls when the car is being driven and turns them on only when it detects that the car is undergoing an emissions test.
With the device off, the car can spew health-threatening pollutant gases into the air, including nitrogen oxide in amounts as much as 40 percent higher than emissions standards, said the US Environmental Protection Agency, which announced the allegations Friday along with California authorities.
The violations could cost VW $18 billion in fines.
On Friday, Volkswagen said it had received notice of an investigation "related to certain emissions compliance matters" from the EPA, the California Air Resources Board and the Justice Department, and that it was cooperating with the investigation.