VW spends ‘cautiously’ in wake of scandal
Volkswagen will cut its spending by 1 billion ($1.42 billion Canadian) next year and “strictly prioritize” investments as it shores up its finances to deal with its emissions-rigging scandal, CEO Matthias Mueller said Friday after a board meeting.
The carmaker has decided to cancel or postpone investments that aren’t “absolutely necessary,” Mueller said. That will reduce overall capital expenditure to 12 billion in 2016.
“What we definitely won’t do is make cuts at the expense of our future,” said Mueller.
Among other things, he said Volkswagen would postpone the building of a new design centre in Wolfsburg, Germany, and the introduction of an all-electric Phaeton sedan, and review other projects.
“We’re driving cautiously over the coming months, but we know where we want to go and we want to ensure that the Volkswagen company comes out of the current situation strengthened,” he told reporters in a short statement, without taking questions, after the 20-member board met at the company headquarters.
Volkswagen in September admitted that almost 500,000 of its fourcylinder diesel cars in the U.S. had cheated on emissions tests thanks to a piece of software.
A total of 11 million cars worldwide have the software, though it has not yet been confirmed it helped cheat on emissions tests outside the U.S.
The carmaker has set aside 6.7 billion to cover the costs of recalling the vehicles installed with the software, but experts say the total expense, including fines and lost sales, could be several times higher.
The company’s scandal widened a bit Friday, as the U.S. Environmental Protection Agency and the California Air Resources Board said its investigation now includes every Volkswagen and Audi model with a larger 3.0-litre diesel engine from model years 2009 through 2016 — a total of roughly 85,000 vehicles.
That comes on top of 482,000 vehicles that Volkswagen admitted in September were rigged to pass emissions tests.