It has been weeks of a hectic cleanup exercise at Volkswagen following the emissions scandal and the latest update shows a realignment of priorities.

Earlier this week, the newly-formed Board of Management headed by its CEO, Herbert Diess, announced some key product decisions. These include a reorientation of the diesel strategy with the most advanced technologies, development of a standardised electric architecture for passenger cars and light commercial vehicles, and a new approach for the next generation of the Phaeton.

The most significant announcement related to investments being reduced by nearly one billion euros annually while the efficiency programme would be accelerated.

Changing priorities

According to the company website, Diess reiterated that the VW brand was repositioning itself for the future. “We are becoming more efficient, giving our product range and core technologies a new focus, and are creating room for forward-looking technologies by speeding up the efficiency programme,” he said.

VW has also decided to switch over to installing only diesel drives with SCR (selective catalytic reduction) and AdBlue technology in Europe and North America at the earliest. Diesel vehicles will only be equipped with exhaust emissions systems that use the best environmental technology.

There will also be a major development thrust for the MQB standardised technical toolkit. The focus is on plug-in hybrids with an even greater range, high-volume electric vehicles with a radius of up to 300 kilometres, a 48-volt power supply system (mild hybrid) as well as ever more efficient diesel, petrol and CNG concepts.

An MEB electric toolkit for future use in compact segment vehicles will also be developed based on the experience gained with existing vehicle architectures. This will be a multi-brand toolkit suitable for both passenger cars and light commercial vehicles. In the process, it will leverage synergies from other electric vehicle projects in the VW group. The standardised system will be designed for all body structures and vehicle types and will enable an all-electric range of 250 to 500 km.

The Board also acknowledged that the Phaeton has embodied the VW brand’s technological competence and brand ambition from the first generation onward. The future generation of the Phaeton will once again be the flagship for the brand’s profile over the next decade.

The Board has now redefined the current project where the specification features a pure electric drive with long-distance capability, connectivity and next-generation assistance systems as well as an emotional design. “We are very aware that we can only implement these innovations for the future of the VW brand effectively if we succeed with our efficiency programme and in giving our product range a new focus,” said Diess.

Perhaps the most critical of these announcements pertains to the slash in spending which could have its fallout in terms of market leadership. VW has made no secret of its aggressive intent to emerge the world’s top carmaker by 2018, a goal which was already achieved in the first half of this calendar when it overtook Toyota.

It now remains to be seen if the top leadership will relegate that objective lower down the priority list since there is a lot of work ahead in bolstering the brand’s image and getting set for a huge payout as a result of the emissions scam. VW could be slightly comforted by the fact that its biggest market, China, is now facing headwinds and growth could be muted through 2016. There could always be time to make up for lost ground and work towards attaining the top slot in 2018.