Volkswagen to reduce spending by £750 million
News
20 Nov 2015
Volkswagen (VW) Group has announced plans to significantly reduce investments in projects such as the all-electric Phaeton, by £750 million per year, in a bid to refocus development plans.
VW has made the decision with the objective of reaffirming its environmental credentials in the wake of the dieselgate emissions scandal. In particular the company plans to overhaul its approach to diesel engines, using only modern diesel engines with selective catalytic reduction and AdBlue injection in Europe and the United States.
VW CEO Matthias Müller said: "We are operating in uncertain and volatile times and are responding to this. We will strictly prioritise all planned investments and expenditures. As announced, anything that is not absolutely necessary will be cancelled or postponed."
Along with the news of reduced capital expenditure, Müller declared VW’s intention to increase expenditure on alternative drive technologies by around £70 million. The increased spending will be aimed at developing alternative drive technologies, including electric and hydrogen fuel cell powertrains by 2016.
Müller added: "We are not going to make the mistake of economising on our future. For this reason we are planning to further increase spending on the development of e-mobility and digitalisation.”
So far, the majority of capex has been earmarked for new products, the continuing rollout and enhancement of the modular toolkits, and the completion of ongoing investments to expand capacity. Examples include product start-ups such as the next-generation Golf, the Audi Q5, the new Crafter plant in Poland, as well as upfront expenditures for the modular electric toolkit (MEB).
