VW dealership traffic 'quite good': AutoNation CEO

Traffic at U.S. Volkswagen (VOW3-DE) dealerships remained "quite good" in September even after the German automaker became embroiled in an emissions test cheating scandal, AutoNation CEO Mike Jackson said Friday.

Last month, Volkswagen admitted to installing so-called "defeat devices" in about 11 million diesel vehicles worldwide. The autos' emissions exceeded federal regulations, but software embedded in the vehicles was engineered to adjust those emissions during tests.

Read More US auto sales total 18.17M in Sept; highest since July 2005

Jackson said Volkswagen's sales were flat last month, compared with a 21-percent rise in September new vehicle sales at AutoNation, the country's largest auto dealer chain. That underperformance is to be expected given that Volkswagen has put a sales stop on all 2016 diesel models.

"If 25 percent of your business is on sales stop, then of course the sales are going to be down. But the customers are still in the showroom," Jackson told CNBC's "Squawk Box."