In light of the fall-out from the #Dieselgate scandal, Volkswagen may be in the midst of postponing or completely dropping a few nonessential vehicles altogether. With new CEO Matthias Muller at the helm, Volkswagen could see a dramatic shift in product.
Volkswagen AG Chief Executive Officer Matthias Mueller said the company will delay or cancel non-essential projects as pressure mounts to slash spending in the wake of the diesel-emissions scandal.
“We will review all planned investments, and what isn’t absolutely vital will be canceled or delayed,” Mueller told some 20,000 employees at the German company’s headquarters Tuesday, according to an e-mailed statement of his remarks. “And that’s why we will re-adjust our efficiency program. I will be completely clear: this won’t be painless.”
Fixing about 11 million rigged diesel vehicles is a costly prospect. The 6.5 billion euros ($7.29 billion) Volkswagen already set aside for repairs won’t be enough to cover fines and potential legal damages as well, Mueller said. The company isexploring options from a simple software upgrade to outright replacing some cars. Fines may reach $7.4 billion in the U.S. alone, according to analysts from Sanford C. Bernstein Ltd.
Volkswagen could put a push to gain market share in the North America on hold as long as there’s no clarity on the extent of the costs of fixing the cars and potential fines, said Jose Asumendi, a London-based analyst at JPMorgan Chase & Co. The carmaker outlined plans in March for an investment of about $1 billion to expand its vehicle assembly plant in Mexico’s Puebla state. That work could face a delay, Asumendi said.
“It’s going to to be tough to find projects they could chop that will actually move the needle,” Asumendi said. “What they really need to do is get costs under control.”
According to Bloomberg, any Volkswagen cars that are “not absolutely necessary will be cancelled or postponed.” Vehicles like the Phaeton, Tiguan GTE, Beetle Dune, and Golf R400, just to name a few.
Even Seat and Skoda could be feeling the heat as well. Rumor has it that the two brands could postpone a number of hybrid and electric vehicles in order to strictly build cars that will make a profit. At least, that’s according to the same report.
But arguably one of the most highly-anticipated cars in recent history, the Bentley EXP 10 Speed 6 sportscar, may never see the light of day either. With millions of dollars likely having to be invested in research and development for the vehicle, the sports car project may be postponed in the name of making money.