VW announces cautious investment cuts

The German automaker will cut investments by one billion euros ($1.1 billion), or about 8%, to 12 billion euros. It said earlier this month it had also overstated fuel efficiency in a few vehicles. “I am personally hopeful we will be able to announce something soon about the remedies … and which we are discussing with the agencies in upcoming days”, Michael Horn, head of Volkswagen’s United States operations, said at the Los Angeles Auto Show on Wednesday.

As it grapples with an ongoing emissions cheating scandal, Volkswagen is “driving cautiously” – financially speaking.

“We will strictly prioritize all planned investments and expenditures…”

The cut in capital spending is VW’s first since the height of the financial crisis in 2009.

In previous years, the company has published investment plans for several years ahead.

Volkswagen lost 1.67 billion euros ($1.83 billion) in the third quarter, due to largely to recall costs, and it warned that 2015 operating profit would fall significantly.

“We will continue to keep a particularly vigilant eye on the job situation”, he added.

Volkswagen’s preference share price was up 1.4 percent at 107.30 euros, making it the strongest riser in Germany’s main stock index, which was 0.5 percent higher.

Among other things, [Mueller] said Volkswagen would postpone the building of a new design center in Wolfsburg and the introduction of an all-electric Phaeton sedan, and review other projects.

The vehicles affected by the inconsistencies in carbon dioxide emissions include the diesel variants of Volkswagen’s Polo, Golf and Passat models, as well as the subcompact A1 and the A3 hatchbacks of the Audi premium brand, Skoda Octavia, Seat Ibiza and Seat Leon.

Later on Friday, VW will be outlining its plan to fix the vehicles in a proposal to the Environmental Protection Agency and the California Air Resources Board, the AP reports. According to Nichols Volkswagen may have to buy back a few of their older diesel cars from current owners. It named two new employee representatives to the supervisory board as well, to replace departing ones.