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Volkswagen's Audi tempers spending plans for 2016

Tuesday, Dec 29, 2015

Volkswagen's flagship Audi division reined in its spending plans for 2016 and delayed the construction of a new wind tunnel on Monday, after the German carmaking group was hit by a scandal over rigged emissions tests.

Audi, which made a higher operating profit than the VW group in the first nine months of 2015, said it would invest more than 3 billion euros ($3.3 billion) on plants and equipment in 2016.

A company source said the plan foresaw spending of 3.3 billion euros for next year. Under its previous budget drawn up a year ago, Audi announced investments of 17 billion euros over 2015-19, or an annual average of 3.4 billion euros.

"With the current investment program, we obviously want to enhance the brand’s strong position, but at the same time, we aim to achieve additional financial scope by means of further process and cost optimization," Audi finance chief Axel Strotbek said in a statement.

The move comes after VW, Europe's biggest automotive group, cut 1 billion euros from its 2016 investment plan in November, as its emissions cheating scandal expanded to include tens of thousands more U.S. vehicles.

Audi vowed not to save at the expense of future growth but rather to examine every investment decision individually.

"The Board of Management has therefore decided to postpone the construction of a new wind tunnel for one year," it said.

The company did not comment on investment plans beyond 2016.

 

reuters.com

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