Wolfsburg, Germany – Volkswagen AG is cutting about $1.1 billion from its spending plans next year to compensate for lower sales and higher costs stemming from its ongoing diesel emissions scandal.
“We are operating in uncertain and volatile times and are responding to this,” says Matthias Müller, Chairman of the Board of Management of Volkswagen Aktiengesellschaft. “We will strictly prioritize all planned investments and expenditures. As announced, anything that is not absolutely necessary will be cancelled or postponed.”
Müller says the automaker will spend nearly $13 billion next year on investments, including a $107 million increase in research and development costs for hybrid and electric vehicles. But some products will be delayed, and plant investments may be cancelled.
“We are not going to make the mistake of economizing on our future. For this reason we are planning to further increase spending on the development of e-mobility and digitalization,” he says.
Müller says construction of the planned new design center in Wolfsburg is being put on hold, saving approximately $107 million. In addition, the construction of a paint shop in Mexico will be reviewed. In the model range, the successor to the Phaeton – a pure-play electric model – is being delayed.
“We will review and potentially cancel further expenditures or spread them out to a greater extent in the next few weeks, but without putting our future viability at risk”, explains Müller. “Together with the works council representatives we will make every effort to keep our core workforce on board.”
Source: Volkswagen AG