First consequences of VW scandal: Brutal cuts in R&D spending

October 13, 2015 // By Christoph Hammerschmidt
In the wake of the Dieselgate scandal about manipulated exhaust gas values, Volkswagen sees itself compelled to change some strategic product directions and to drastically cut R&D spending. As a signal for a new start, the company puts more emphasis on powertrain electrification.

In a special meeting, the newly-formed Volkswagen board of management took a number of strategic decisions, including a reorientation of its diesel strategy and a reduction of R&D spending by € 1 billion compared with previous planning – apparently a measure to cut cost in anticipation of penalties and compensation for damages.

The board also took several decisions regarding the future model strategy. As a direct reaction to the public outcry over the forged exhaust gas tests, the company will install only diesel drives with SCR (Selective Catalytic Reduction) and AdBlue technology in Europe and North America as soon as possible.

Not directly related to the diesel scandal but apparently as a cost-cutting measure, the company will develop a standardised architecture for passenger cars and light commercial vehicles. The existing Modular Transverse Toolkit (MQB) that standardises (among other components) the powertrain across various brands of the Volkswagen group, including VW, Audi, SEAT and Skoda. The focus of the development lies on plug-in hybrids with greater range, high-volume electric vehicles with a driving range of up to 300 kilometres (186 miles), a mild hybrid with 48-Volt power supply system. By the same token, the company announced to define a standard for connectivity and driver assistance.

As another measure obviously intended to highlight Volkswagen’s ambitions to get back onto the green side of the world, the Phaeton luxury car will be re-defined: The company now plans to equip it with an all-electric drive with long-distance capability. Comprehensive connectivity features and advanced driver assistance systems will round off the image of a “green and cool” vehicle. Interestingly, there was no mention of autonomous driving. And given the current state of the art in battery technology, it certainly would not be realistic to expect the E-Phaeton before 2020.

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