(Adds CEO comment, detail and background)
WOLFSBURG, Germany Nov 18 Volkswagen
will cut spending on factories, equipment and
technology over the next four years, it said on Friday, as it
struggles to fund a strategic shift to electric cars while
grappling with the cost of its emissions scandal.
Volkswagen (VW) announced a long-awaited turnaround plan for
its core brand on Friday which foresees 30,000 job cuts globally
at the division and 3.7 billion euros ($3.9 billion) in annual
cost savings from 2020.
After a meeting of its supervisory board, VW said it would
steadily reduce capital expenditure in the coming years to 6
percent of automotive sales by 2020 from 6.9 percent last year,
and cut development costs to the same level.
"The VW group will refine its focus," Chief Executive
Matthias Mueller said in an emailed statement. "We are investing
more selectively and are setting clear priorities."
The statement was short on detail compared with VW's annual
rolling budget updates before the emissions scandal, which
included absolute spending targets for products, capacity and
even its Chinese joint ventures.
In its November 2014 update published before the scandal, VW
announced 85.6 billion euros of spending in its automotive
operations over a five-year period with the Chinese ventures
adding another 22 billion euros.
A VW spokesman said the company was no longer fixated on
providing "big numbers" and was instead prioritising quality
"Transparency falls by the wayside in times of uncertainty
and problems," said NordLB analyst Frank Schwope who has a
"Hold" recommendation on VW shares. "That's a clear sign that
things are not going well for a company."
($1 = 0.9418 euros)
(Reporting by Andreas Cremer; editing by David Clarke)