Volkswagen's supervisory board has condemned remarks made by the company's chief executive, when he alluded to a Nazi-era slogan while describing the carmaker's earnings potential.

Key points: Herbert Diess apologises for saying "EBIT macht frei", similar to the Nazi slogan "Arbeit macht frei"

Herbert Diess apologises for saying "EBIT macht frei", similar to the Nazi slogan "Arbeit macht frei" The Volkswagen supervisory board has condemned the remarks

The Volkswagen supervisory board has condemned the remarks Analysts say management change has now become a significant risk

Herbert Diess this week said "EBIT macht frei", before apologising for the comments and explaining he in no way wanted to draw a comparison to the Nazi-era slogan "Arbeit macht frei" or "Work sets you free", which appeared on the gates of Auschwitz during the Holocaust.

EBIT refers to a company's earnings before interest and taxes.

"Experience at Volkswagen shows that brands with higher margins normally have greater freedom of choice within the group. My statement referred to this fact," said Mr Diess, who made the remark at an internal meeting for employees.

"At no time was it my intention for this statement to be placed in a false context."

The front gate of the Auschwitz concentration camp in Poland. ( peuplier: www.flickr.com )

Volkswagen's supervisory board on Friday said the group's history and the responsibility it therefore bears was a major part of its corporate identity.

"The statement of the CEO Herbert Diess is in this context considered inappropriate and difficult to comprehend," it said in a statement.

"The supervisory board of Volkswagen AG strongly distances itself from this, but at the same time takes note of the immediate apology from Mr Diess."

Analysts at Bernstein said management change at Volkswagen had become a significant risk following the supervisory board's statement.

"For those looking for historic parallels, the last time anyone at VW used this language was in 2015, when supervisory board chairman Ferdinand Piech said he was "at a distance from" Martin Winterkorn, the then CEO. Winterkorn was soon gone," they wrote.

Volkswagen's supervisory board said the group's history is a major part of its corporate identity. ( AP: Christophe Gateau )

Asked whether Bernstein analyst Max Warburton was right to suggest that Mr Diess had lost support internally as a result of the remarks, Volkswagen's supervisory board said such an inference was inappropriate.

"This comparison is nonsense," a spokesman for supervisory board chairman Hans Dieter Poetsch said.

Reuters/ABC