Volkswagen to cut spending by $1.07 billion in 2016

In the wake of it emissions-rigging scandal, German automaker Volkswagen will cut its spending by 1 billion euros (US$1.07 billion) next year and “strictly prioritize” investments.

As reported by the Associated Press, Volkswagen CEO Michael Mueller has announced that the company has decided to cancel or postpone investments that aren’t “absolutely necessary”, in a move to reduce overall capital expenditure to 12 billion euros in 2016.

Among other things, AP reports, Volkswagen will postpone the building of a new design centre in Wolfsburg and the introduction of an all-electric Phaeton sedan, and review other projects.

“We’re driving cautiously over the coming months, but we know where we want to go and we want to ensure that the Volkswagen company comes out of the current situation strengthened,” Mueller said in a statement.

In September 2105, Volkswagen admitted that almost 500,000 of its four-cylinder diesel cars in the U.S. had cheated on emissions tests; the company has not yet confirmed whether or not it cheated on emissions tests outside the U.S.

The carmaker has set aside 6.7 billion euros (US$7.4 billion) to cover the costs of recalling the vehicles involved in the fraudulent emissions tests.