Volkswagen AG plans a shift in focus to more plug-in hybrids and electric vehicles, as the company adopts diesel technology it previously eschewed for smaller models.
The company will reduce investment at its main passenger car brand by about $1.1 billion a year and speed up an existing cost-cutting push as the impact of the diesel-emissions scandal ripples through the automaker, ANE reports.
The lower spending on developing new vehicles and upgrading factories amounts to a reduction of about 6% in outlays.
"The Volkswagen brand is repositioning itself for the future," Herbert Diess, head of the German manufacturer's largest unit, said in a statement on Tuesday. "We are creating room for forward-looking technologies by speeding up the efficiency program."
VW is under increasing financial strain following revelations last month that it rigged diesel engines to circumvent emissions regulations.
The German carmaker essentially admitted that its diesel strategy was wrong.
"There is a real chance for VW to even extract something positive from the diesel fiasco," said Stefan Bratzel, head of the Center of Automotive Management near Cologne.
"Funneling more resources into electric mobility gives them a credible future perspective to try to overcome this crisis."
