Consumer group Choice is warning a lack of regulation could see Australia become a dumping ground for high-emission cars as an emissions cheating scandal envelopes German carmaker Volkswagen.

"There absolutely is a risk that Australia could end up as a dumping ground for dirty vehicles," Matt Levey, Choice director of campaigns and communications, told 7.30.

"If you have standards in Australia that are weaker than in Europe and the United States, we'll get the dirty products.

"That's not good enough for Australian consumers."

Australia lags behind Europe and the US with restrictions on vehicle emissions.

"Australia is an international laggard on motor vehicle emissions," former national transport commissioner Frank Muller told 7.30. ( 7.30 )

Former national transport commissioner Frank Muller says that is partly because regulation is handled by the Department of Transport, rather than the Department of the Environment.

"Australia is an international laggard on motor vehicle emissions," Mr Muller told 7.30.

"On fuel efficiency we have no standards at all.

"We are the only advanced economy with no regulation of carbon pollution, no standards that ensure motor car buyers get fuel-efficient and hence cheaper-to-run cars.

"Even China and other major developing countries have fuel efficiency standards."

'Serious implications' for local car manufacturers

Mr Muller said he believed the lack of regulation was the result of pressure from Australia's local car manufacturing industry, a view acknowledged by Deputy Prime Minister Warren Truss.

"We've had design standards in Australia that have met the needs of our manufacturers in this country," Mr Truss told 7.30.

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But he said that would change.

"If we were to introduce those rules immediately that would have serious implications for the existing car manufacturers in Australia," Mr Truss said.

"But as we move out of manufacturing there is no reason why we wouldn't have standards equivalent to the best in the world and that is the direction that we are taking in the present time.

"In this particular instance, it's obvious that a company may have gone to deliberate action, taken deliberate action, to defeat the rules.

"Now that kind of thing is completely unacceptable.

"It's important that every manufacturer, whether they're in Australia or whether they're around the world, behaves honourably and abides by the laws in the particular countries concerned."