Even for an automotive manufacturer as big as Volkswagen, this is going to hurt!
This article titled “Volkswagen announces £750m spending cuts to fund product revamp” was written by Sean Farrell, for The Guardian on Tuesday 13th October 2015 12.09 UTCThe Volkswagen Group has announced €1bn (£750m) of spending cuts at its core VW division to help pay for a product overhaul following the emissions testing scandal that has rocked Europe’s biggest carmaker.
Herbert Diess, the chief executive of the VW brand, said he would overhaul the division’s strategy to concentrate on electric and hybrid vehicles and revamp all diesel cars and vans to feature cleaner exhaust emissions systems.
The next version of the luxury Phaeton saloon car will be electric and VW will develop a standardised electric toolkit to fit all passenger cars and light commercial vehicles.
Diess said: “The Volkswagen brand is repositioning itself for the future. We are becoming more efficient, we are giving our product range and our core technologies a new focus, and we are creating room for forward-looking technologies by speeding up the efficiency program.
“We are very aware that we can only implement these innovations for the future of the Volkswagen brand effectively if we succeed with our efficiency program and in giving our product range a new focus.”
Diess announced the plans, apparently designed to reinforce VW’s environmental credentials, as data showed the emissions affair had damaged business confidence in Germany.
The scandal, which has raged since Volkswagen admitted cheating US emissions tests last month, could cost the company as much as €35bn in fines, lawsuits and other costs, analysts have estimated.
Morale among German investors and analysts, also affected by slowing emerging market economies, has fallen sharply, sending the ZEW thinktank’s economic sentiment indicator down from 12.1 to 1.9.
The VW scandal has stunned the German business establishment, which looked on the Lower Saxony carmaker as a symbol of the country’s engineering expertise.
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