Volkswagen has announced that they will be cutting costs and investing in new technology in light of the emissions scandal.
Herbert Diess, Volkswagen’s brand chief, has said that investments will be cut by £750 million per year and efficiency measures will be “stepped up”. Dr Deiss also stated that VW are looking to become more efficient and are going to give their product range and core technologies a new focus.
From what has been said it looks like VW are going to focus on the development of electric vehicles, but put on hold the development of any new vehicles. The company has also refused to rule out job losses across the brands affected.
It’s not entirely surprising that VW are cutting costs as they may be facing huge fines, class action lawsuits and maybe even criminal penalties in the US and possibly other countries as well. Volkswagen has set aside £4.85 million to cover the costs of the emissions scandal but this is unlikely to be enough.
Around 1.2 million cars in the UK have been fitted with the emissions cheating device, and 400,000 of these will need alterations to their engines, as well as a software update, to bring them up to appropriate emission levels.
Chief Executive, Paul Willis, speaking to a select committee of MPs denied that the decision to fit the cheat device was made at board level. He said that it was a “rogue few” that made the decision at an engineering level. Many MPs were sceptical of this claim, stating that they thought it was unlikely such a major decision was made without executives knowing about it.
VW shareholders are also suffering this week as the company is down around 20%. There has been a slight recovering since the week before but it’s unlikely to have any major recovery at this stage. Volkswagen may have irreparably damaged their reputation and it will take a long time for consumers and shareholders to trust them again.
Until we know what the fix is going to do to vehicles across the brand, including VW, Skoda, Seat, Audi and Bugatti, we don’t know how it is going to affect them. The fix could possible lead to changes in performance, devaluation of cars, or further expenditure. But with VW keeping quiet about what the “fix” actually is, we can’t say whether customers will be out of pocket.
Slater and Gordon are compiling a list of affected customers, both vehicle owners and shareholders, who have been affected by the emissions scandal. So far over 2,000 people have joined us. If you would like to register for a potential claim against Volkswagen please visit our VW Emissions Scandal Litigation page and leave your details.
Jacqueline Young is Head of Group Litigation at Slater and Gordon Lawyers UK.
Follow Jacqueline on Twitter for live updates on the VW scandal.