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WOLFSBURG (Reuters) -- Volkswagen Group is dealing with a slowdown in new-car orders in the wake of admitting this month that it understated fuel usage and carbon dioxide emissions, VW's top labor representative said on Friday.

"There is caution in buying," Bernd Osterloh, the company's works council chief, told reporters. "The CO2 issue has triggered a greater crisis of confidence [in VW products] than the nitrogen [oxide emissions] issue."

VW said on Nov. 3 it had understated the level of CO2 emissions in about 800,000 cars sold mainly in Europe. The automaker expects costs of at least 2 billion euros ($2.1 billion), including compensation payments to customers, as a result of the providing inaccurate data.

Two weeks later, VW said the CO2 scandal, which mainly involved diesel cars, affected more gasoline-powered vehicles than previously disclosed.

VW's revelations about providing erroneous fuel economy and CO2 emissions have deepened the crisis that initially centered on manipulated software used in up to 11 million diesel vehicles worldwide. VW admitted in September that it had understated actual emissions of the pollutant nitrogen oxide in those vehicles.

VW Group is facing a separate crisis in the U.S. after the company informed authorities last week that about 85,000 group vehicles with 3.0-liter V-6 diesel engines were fitted with emissions-control equipment that was not disclosed to U.S. regulators.

Global sales of VW Group vehicles fell 3.5 percent in October, though they edged up 0.5 percent in Germany. VW has denied reports that orders and sales have started to plunge in the wake of the emissions scandal.

Osterloh, who also sits on the VW supervisory board's influential steering committee, said there could be risks to jobs should the decline in orders persist.

"Employment is safe provided we are selling cars," he said. "If we sell no cars, it will get relatively difficult."

"We will have to look at incoming orders of the next days, weeks and months," he added.

Automotive News Europe contributed to this report
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