German auto giant Volkswagen AG says it is weighing up whether to appeal an Australian record $125 million fine for breaching diesel emissions standards, stating an initial $75 million penalty agreed with the ACCC was "fair".

The fine - the biggest on record for a breach of Australian consumer law - was handed down on Friday after the Federal Court declared by consent Volkswagen AG did not disclose the existence of "two-mode" software when it sought approval to supply and import more than 57,000 vehicles into Australia between 2011 and 2015.

Essentially, Volkswagen's software made its diesel cars, utes and vans operate in two modes: one that was designed to test well and another that operated when the vehicle was actually being used and which produced higher emissions.

The car maker already settled a separate Australian class action in September for between $87 million and $129 million, and said in a release it was considering an appeal of the fresh $125 million penalty.