VW to postpone projects that aren’t ‘absolutely necessary,’ cancels 2016 diesels

Matthias Müller
Matthias Müller
Volkswagen’s “Dieselgate” scandal isn’t just an embarrassment to the industry and a shocking betrayal of consumer trust, it’s also an incredibly damaging blow to the company’s bank account. As a result, things are going to change.

As we discussed in September, Volkswagen Group is set to undergo significant restructuring in the coming months, including the merger of the U.S., Canadian, and Mexican markets into one entity. At a recent meeting in Wolfsburg, Germany, former Porsche boss and current Volkswagen Group CEO Matthias Müller outlined adjustments to help foot the dieselgate bill. As of this writing, the group has set aside 6.5 billion euros ($7.3 billion) to mitigate service costs, fines, and other expenses relating to the investigation, but the scandal is likely to cost the company much, much more than that in the end.

The obvious way for VW to deal with the financial hit is to reduce the number of ventures it commits its resources to. In a statement, Müller said, “We have initiated a further critical review of all planned investments. Anything that is not absolutely necessary will be cancelled or postponed. And it is why we will be intensifying the efficiency program. To be perfectly frank: This will not be a painless process.”

The Volkswagen Group umbrella is a large one, so the number of affected projects could be similarly substantial. Recently announced endeavors like the Porsche Mission E, Audi e-tron quattro, Bugatti’s Veyron successor, and many others are all at risk now, although that is admittedly pure speculation at this point. Volkswagen has, however, withdrawn its application to sell 2.0-liter diesel models in the U.S. for the 2016 model year.

Müller additionally noted that those with applicable vehicles will receive information about upgrades to their cars soon. “In many instances a software update will be sufficient. Some vehicles, however, will also require hardware modifications. We will keep our customers constantly informed about the measures and arrange workshop appointments.”

“Only when everything has been put on the table, when no single stone has been left unturned, only then will people begin to trust us again,” he said. The recall process is expected to begin in January 2016.

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