As it grapples with an ongoing emissions cheating scandal, Volkswagen is "driving cautiously" — financially speaking.
The German carmaker is cutting spending by a billion euros ($1.07 billion) in the coming year, CEO Matthias Mueller announced Friday.
After the cuts, Volkswagen will be spending 12 billion euros in 2016, The Associated Press reports:
"Among other things, [Mueller] said Volkswagen would postpone the building of a new design center in Wolfsburg and the introduction of an all-electric Phaeton sedan, and review other projects."
" 'We're driving cautiously over the coming months, but we know where we want to go and we want to ensure that the Volkswagen company comes out of the current situation strengthened,' he told reporters."
The company has been battered by the discovery that millions of VW diesel vehicles were sold with "defeat devices" secretly installed — software that allowed the car to determine when an emissions test was being performed, and then reduce performance and emissions to cheat the test.
As a result, VW cars could pass the test — then drive off and release up to 40 times more pollution than legally allowed.
Later on Friday, VW will be outlining its plan to fix the vehicles in a proposal to the Environmental Protection Agency and the California Air Resources Board, the AP reports. For most of the cars, VW can either alter the exhaust system (cutting performance and gas mileage) or install a chemical treatment process (requiring multiple hardware changes).
The automaker has set aside more than $7 billion to cover the alterations, but the AP reports the total cost could be several times higher — and Volkswagen is also facing the possibility of billions of dollars in fines.
Meanwhile, this fall, VW reported a quarterly loss for the first time in more than 15 years.