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article imageScandal-hit VW to cut investment by 1 bn euros a year

By AFP     Oct 13, 2015 in Business

German auto giant Volkswagen said Tuesday it would slash its annual investment budget by one billion euros ($1.13 billion) for its main VW brand in the wake of the pollution-cheating scandal.

"The newly-constituted management board of the VW brand has taken a number of strategic decisions in an extraordinary meeting today," the company said in a statement.

Among other measures, brand chief Herbert Diess had decided "that investments will be cut by one billion euros per year and efficiency measures will be stepped up," the statement said.

"The Volkswagen brand is realigning itself for the future. We will be more efficient, will reorganise our product range and core technologies and with the accelerated efficiency measures, we will have more room for trend-setting new technologies," Diess said.

VW is currently battling its biggest-ever scandal after it was forced to admit last month that it had fitted 11 million cars worldwide with devices aimed at cheating pollution tests.

The affair threatens to cost the group, which is the world's biggest car maker in terms of sales, many billions of euros in fines and legal costs. And the fallout in terms of lost sales and customer trust is still incalculable.

The group's chief executive Martin Winterkorn stepped down as a result of the scandal.

Brand chief Diess vowed to implement the measures with "all our strength".

"Even in difficult times, the Volkswagen team has again and again proved" its mettle, Diess added.

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