Volkswagen to cut investment by €1bn a year

Volkswagen has said it will cut investment by €1bn ($1.1bn; £750m) a year as a result of the diesel emissions scandal.

The troubled German carmaker said efficiency and technology would be the company's watchwords as it "repositioned itself for the future".

It added that all new diesel cars would be fitted with the "best environmental technology".

There will also be greater focus on hybrid and electric vehicles.

"We are becoming more efficient, we are giving our product range and our core technologies a new focus, and we are creating room for forward-looking technologies by speeding up the efficiency programme," said VW's Dr Herbert Diess.

The carmaker said it would now be fitting the kinds of clean diesel technologies needed to meet stricter US standards across all its cars in both the US and Europe.

It also revealed that its flagship Phaeton model would in the future be purely electric, capable of driving long distances on a single charge.

Analysis: Theo Leggett, BBC business correspondent

It's no surprise VW is cutting investment. It is facing potentially huge fines, class action lawsuits and possible criminal penalties, in the US and quite possibly other countries as well. The €6.5bn it has set aside to cover the costs of the emissions scandal is unlikely to be anywhere near enough.

The company now says it will only use "the best environmental technology" in its diesel cars. In practice, this means abandoning so-called 'lean NOx traps' in favour of more complex and more expensive urea injection technology. A cynic might say it should have done that much sooner.

So now VW will focus on developing electric cars and plug-in hybrids, using standard parts and processes that can be rolled out across different types of vehicles and different brands.

It's fair to say the industry as a whole is moving in this direction anyway. Even so, Volkswagen's change of course does look rather like a scandal-induced handbrake turn.

Investigation

VW has already appointed a new chief executive and chairman after the revelations last month that its cars cheated emissions tests in the US.

The company has launched a thorough investigation into the scandal, but new chairman Hans Dieter Poetsch warned last week that answers would take "some time".

VW has set aside €6.5bn ($7.4bn; £4.8bn) to cover the costs of the scandal, but some experts believe the final bill could be much higher.

Shares in the company recovered slightly last week but are still down about 20% since the scandal broke in the middle of September.