Sixty-six institutional investors are to take legal action against Volkswagen in its German home market after the carmaker cheated emissions tests in the US. The first claim will be made within the next seven days.

The legal action will heap further pressure on Volkswagen, which earlier this month said its annual sales fell last year for the first time in more than a decade.

Klaus Nieding, a lawyer at Nieding and Barth, the German law firm, said a capital market model claim, which is similar to a collective lawsuit in the US, will be filed “within the next week” in Germany on behalf of a US institutional investor that has suffered a “big loss”. He declined to name the plaintiff.

The other 65 institutional investors are expected to join that claim.

Investors have been nursing heavy losses after the US’s Environmental Protection Agency revealed last September that the world’s second-largest carmaker had cheated US emissions tests by fitting vehicles with “defeat devices” designed to bypass environmental standards.

Billions of euros have been wiped off the value of Volkswagen as a result.

Nieding and Barth is working with MullerSeidelVos, a fellow German firm, and Robbins Geller Rudman and Dowd, a US law firm, to represent investors that have contacted DSW, a German shareholder protection association.

Mr Nieding said the law firms collectively represent “many foreign institutional investors, primarily from the US, with claims of several hundred million euros”. He added: “We are representing, as far as we know, the largest number of claims and of shareholders [in Germany].”

Bentham Europe, a litigation finance group backed by Elliott Management, the US hedge fund, and Australian-listed IMF Bentham, is also expected to file a damages claim in Germany.

Volkswagen is facing additional legal action outside its home market. Class actions against the carmaker, which allow one person to sue on behalf of a group of individuals or companies, have already been filed in the US and Australia.

Last week, the Arkansas State Highway Employees Retirement System, a $1.4 billion pension fund, was named the lead plaintiff in a class action against VW in the US.

“We will be prosecuting the claims on behalf of the class vigorously,” said Jeroen van Kwawegen, a lawyer at Bernstein Litowitz Berger and Grossmann.

The law firm is acting on behalf of investors who put money in Volkswagen’s American depositary receipts, a type of stock that represents shares in a foreign corporation.

The US justice department, on behalf of the EPA, has also filed a lawsuit against Volkswagen, while several institutional investors are still weighing up whether to take legal action against VW.

The City of Philadelphia Board of Pensions and Retirement, which oversees a $5.7 billion pension pot, said the city’s law department is “considering potential foreign claims against Volkswagen”.

APG, the Dutch Pension fund that manages €400 billion, also said it is “not ruling out legal action”.

A spokesperson for Dimensional Fund Advisors, the US fund house that is suing Petrobras, the Brazilian company caught up in a multibillion-dollar corruption scandal, said: “We explore all of our legal options in situations such as these.”

Volkswagen did not respond to a request for comment at the time of going to press.