Frankfurt:
German auto giant Volkswagen announced today it would slash one billion euros off its annual investment budget and push ahead with its drive to develop electric cars in the wake of the diesel pollution scandal.
The world's biggest carmaker in terms of sales, currently embroiled in its worst-ever scandal, said that the new board of its main VW brand had taken a number of strategic decisions at an extraordinary meeting today.
Among a range of other measures, brand chief Herbert Diess had decided "that investments will be cut by one billion euros ($1.13 billion) per year and efficiency measures will be stepped up," the group said in a statement.
"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 was forced to admit last month that it had fitted 11 million diesel cars worldwide with devices aimed at cheating pollution tests.
The affair rocked the automobile sector around the world.
And for VW itself, it threatens to cost many billions of euros in fines and legal costs, let alone the still incalculable fallout in terms of lost sales and customer trust.
VW's chief executive Martin Winterkorn was forced to step down as a result of the global uproar and more heads could roll as investigators around the world try to find the masterminds and culprits behind the scam.
Diess said that the VW brand would now switch to more advanced and more expensive technology for all its diesel engines in Europe and North America "at the earliest possible date."
"Only the environmentally best exhaust systems will be used in our diesel vehicles," he said.
The brand would also press ahead with the development of its plug-in hybrids with a much wider radius, as well as more efficient diesel, petrol and gas engines, Diess said.
And the new version of VW's luxury Phaeton model would be electric.
Diess, who was appointed head of the VW brand in July, vowed to implement the new measures with "all our strength".
"Even in difficult times, the Volkswagen team has again and again proved" its mettle, Diess added.
Investors were not too pleased about the cutback in investment and VW shares were among the main losers on the Frankfurt stock exchange today, shedding 2.86 percent in a weaker market.