The Australian Competition and Consumer Commission (ACCC) said it is investigating Volkswagen Group for possible use of "defeat devices" as a priority and a matter of significant public interest.

Volkswagen has been under fire for using software to cheat emissions tests in its diesel vehicles.

The scandal has also affected other brands that use the engines, including Audi.

ACCC chairman Rod Sims said he was losing patience with Volkswagen.

"Look we are frustrated," Mr Sims said.

"We've got concerns under two headings — one, whether consumers have been mislead, and two is whether mandatory standards have been breached by the use of these 'defeat devices' — and getting information is proving very difficult.

"Cars are a big purchasing decision and claims that relate to environmental benefits or fuel efficiency can influence consumer choice. Businesses must be able to substantiate any claims they make."

He said Volkswagen could be taken to court to face a penalty of $1.1 million per breach, if it were found to have broken Australian Consumer Law on either count.

"A tricky question is to how many breaches may be involved, but the penalties be quite considerable."

Mr Sims said the ACCC could make voluntary or mandatory requests for information to Volkswagen Group.

"We usually like to do these things voluntarily," he said, "but if we don't get some answers soon we might well be making compulsory requests."

Mr Sims said the ACCC would seek talks with Audi Australia after the company reportedly confirmed that its local models are fitted with the cheat software.

"There's so much we don't know, but we're certainly on the case and we're pursuing that right now," he said.

The ACCC said it would seek marketing materials from Volkswagen and would not hesitate to take action if consumers were exposed to false, misleading or deceptive representations.

Volkswagen Australia has yet to clarify whether it supplied cars or car components with defeat devices — instruments that interfere with emissions control systems — to the local market.

The maximum penalty per breach of the Australian consumer laws is $1.1 million for a corporation.