If the governments do what they should they will protect consumers - that's car buyers in this case - from the effects of this mess. But they'll probably protect the industry first.
Politics is the art of the possible.
It's not possible to fix all those cars instantly. If this is an industry-wide problem and not a VW one, any proper fix will take a ten-year view (average life of a car is about ten years).
It's not sensible to drive the EU car industry into bankrupcy, and end up having to import all cars from countries which care less about air quality than we do. To that extent, the motor manufacturers may get off lightly.
OTOH a good start would be to tax petrol and diesel by the Megajoule, not by the litre. Diesel contains more energy per litre: it's somewhat cheaper than it should be (not hugely so). So cut the tax on petrol. (BTW no self-interest - I drive a diesel).
And once the facts are known, change the VED regime to reflect typical on-the-road emissions of all pollutants, not just CO2 emission in a very flawed lab test. Better, scrap annual VED. Put a one-off charge on new cars to reflect their likely lifetime emissions, and add enough tax on petrol and diesel to ensure government tax-take is unaffected. That'll put more pressure on drivers to minimize fuel consumption, both in new car choice and all car usage, and emissions will look after themselves if they're largely proportional to fuel consumption.
In ten years time we'll be where we should have been today, with the cars on the road reflecting the best achievable pollution levels. This is a scandal that may yet become a much larger one, but it is not a catastrophe.