Investment spending a VW casualty

VOLKSWAGEN (VW) is to reduce investment spending at its main passenger-car brand by € 1 billion (R15.13bn) a year and speed up other cost cuts in the wake of its diesel emissions cheating scandal.

The German car maker would switch to a different technology for treating diesel emissions in Europe and North America “as soon as possible”, the Wolfsburg-based car maker said yesterday. VW plans to put more focus on developing plugin hybrids and other electricpowered vehicles, including redesigning the Phaeton sedan as an all-electric model.

The cuts come amid renewed criticism for VW’s handling of the scandal, which affects some 11 million cars worldwide. The company was far too slow to disclose its use of software to enable its diesel cars to pass US laboratory emissions tests, despite far higher on-road pollution, said Stephan Weil, the prime minister of the German state of Lower Saxony and a VW board member.

“This admission should clearly have come much sooner – a further serious mistake,” Weil told the Lower Saxony parliament yesterday. “Who decided this course of action and when is also something that’s being investigated.”

A VW supervisory board committee charged with overseeing the external investigation into the emissions cheating met yesterday in Wolfsburg. The company has so far set aside € 6.5bn for repairs and to compensate customers, and has said that amount will not be enough.