Brand value of German automaker Volkswagen has eroded by a massive $10 billion following the revelation of emission test scandal by the company in the US.

Besides, Volkswagen's rank has now slipped to fifth position from the third spot in a list of top global automotive brands, after the company said that it deceived US regulators to get emission test clearances by using a software program.

The scandal, which saw the company's CEO Martin Winterkorn quitting the post this week, is expected to impact 11 million of its cars worldwide.

Volkswagen's brand value now stands at $21 billion, according to the latest assessment by Brand Finance. In its previous assessment, the international brand valuation firm had valued the company at $31 billion.

"On first look, it appeared Volkswagen might escape such severe brand damage. But, as the scale of the deception has emerged over the past few days, it is beginning to look as though VW would face a crisis on an unprecedented scale," Business Standard quoted, Brand Finance's CEO David Haigh, as saying.

Alarmed by one of the biggest scandals in global auto industry, the Indian government has ordered a probe into Volkswagen to ascertain if the company has violated rules to get emission test clearances in India as it did in the US.

The carmaker said that it would allocate funds worth $7.3 billion in the third quarter to cover the damages resulting out of the biggest scandal in its 78-year-history.

But the US Environmental Protection Agency (EPA) said last week that Volkswagen may need to pay penalties to the tune of $18 billion. "Volkswagen is having to deal with an unprecedented loss of credibility, something that rivals such as Toyota, Honda and Nissan did not have to. This, despite facing the challenge of having to contend with faulty air bags fitted by Japanese supplier Takata, resulting in one of the biggest products recalls in the US and other markets by these firms recently," said Santosh Desai, managing director and CEO, Future Brands.