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Volkswagen to Trim Investment by $1.1bn Following Emission Scandal

Volkswagen has announced that it will wind down its annual investment by $1.1bn or £750m due to the diesel emission scandal that the company is embroiled in.

Volkswagen to Trim Investment by $1.1bn Following Emission Scandal 

According to the German car manufacturer, cutting down its investment expenditures would allow the company to position itself for the future and to focus on technology and efficiency.

In a statement, the company also emphasized that its new batch of diesel cars would feature top of the class environmental technology. The carmaker is said to shift its focus to electric and hybrid vehicles.

According to a statement on the company’s website, Volkswagen will focus on “becoming more efficient, giving our product range and our core technologies a new lease of life and  creating room for  progressive technologies by speeding up the program on efficiency.”

The company was particularly keen to add it will fit clean and efficient diesel technologies that adhere to strict US standards for cars in the US and in the rest of Europe.

The car manufacturer further revealed that its new Phaeton model would be electrically powered and would drive longer distances with just a one-off charge.

Too much, too late?

According to BBC correspondent Theo Leggett, the decision for VW to cut it investment expenses is unsurprising given that the company is set to incur major losses on legal battles.  So far, the company has set aside 6.5bn EUR to deal with the scandal but observers are skeptical whether this amount is enough, given the potential criminal penalties facing the country.

Leggett pointed out that by claiming to shift its focus to the best environmental technology, the carmaker would be doing nothing other than leaving its inexpensive NOXtraps for far more expensive technology involving urea injection technology.

The newly appointed chief executive and chairman, Hans Dieter Poetsch is cautious about the company’s recovery from the crises and warned that it may take a while before VW reclaims its former glory.

VW shares are down 20% since September when the scandal first broke.

 

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