VW brand to cut investment, change diesel strategy

Volkswagen has said it aims to complete a refit of vehicles affected worldwide by the end of 2016, with a few requiring more complex and expensive changes to hardware.

Economy Minister Sigmar Gabriel said he did not think Volkswagen’s problems would do lasting damage to Europe’s largest economy, however.

Horn also said the automaker was looking at giving owners rebates to cover the diminished value of their vehicles.

But the company has a mountain to climb. Market experts presume that about 120,000 Volkswagen and Audi vehicles might have been manipulated in South Korea by the same software found by the U.S. environment regulators and be subject to a recall. However, with details emerging of similar software being used in Europe and Asia, alongside plans to recall and refit existing models, that figure could balloon.

VW wants to extract 3 billion euros ($3.41 billion) in price cuts from its suppliers to help mitigate the costs of the emissions scandal, German newspaper Handelsblatt reported.

The Phaeton, a project introduced by former CEO Ferdinand Piech, has been criticized as a money-loser.

“The Volkswagen brand is repositioning itself for the future”. But VW claims this software functions differently than the illegal “defeat” devices in a few diesel vehicles from model years 2009 to 2015. Volkswagen sold 10.1 million vehicles in total previous year.

On Monday, the credit rating firm, Standard & Poor’s (S&P) reduced the long-term debt rating of Volkswagen AG (OTCMKTS:VLKAY); the German automobile manufacturer, who is struggling to survive in the wake of the emission cheating scandal concerning its diesel-based models.

Italian finance police raided the headquarters of Volkswagen’s Lamborghini sports auto division on Thursday, an investigative source said, as part of a criminal inquiry into alleged commercial fraud by the parent company.

The AdBlue and SCR procedure is considered the best way to reduce toxic tailpipe emissions, but it is more expensive to deploy than the method VW opted for in its TDI diesel engines.

“The standardized system will be designed for all body structures and vehicle types, thus allowing particularly emotional vehicle concepts, and will enable an all-electric range of 250 to 500 kilometers”, the company said in the announcement.

Meanwhile, there’s more turmoil in Volkswagen’s executive ranks.